Aston Martin posts RM399.8 million loss in 1H 2019

British luxury marque Aston Martin recorded substantial losses for the first half of this year, according to financial documents released by the automaker. The firm saw losses of £78.8 million (RM399.8 million) before tax, in contrast with £20.8 million (RM105.2 million) in profit before tax for the same period last year. Its shares dropped by over 20% following news late last month of a sales slump across Europe.

The marque attributed its loss-making performance to the slowdown of the luxury market segment, along with reduced demand for its products in the UK and Europe, which saw declines of 17% and 19% respectively. These were offset by growth in the United States (up 54%) and Asia Pacific (up 24%) including China (up 39%), culminating in retail sales growth of 26% year-on-year.

The reduction in operating profit year-on-year was due to planned costs of expansion, improved retail financing offer, reduced special models volume and a lower average selling price, the company said, as well as a one-off provision for doubtful debt related to the planned sale of select intellectual property rights in the previous year.

The aforementioned 26% retail growth was driven by demand for the Vantage and DBS Superleggera, while demand for special models has been encouraging with the development of the sold-out Valkyrie and the oversubscribed Valhalla models, the company said. The recorded reduced revenue was due to fewer big-ticket special models and the increased popularity of the Vantage, in urn reducing the average selling price.

Aston Martin expects sales volumes of its Specials to grow next year, helped with the limited run DB4 Zagato Continuation due in the fourth quarter of this year. It has also revised planned wholesale volumes for the full year, from the initial forecast target of 7,100 to 7,300 units to the revised target of 6,300 to 6,500 units.

The firm’s Second Century growth plan has also seen heavy investment, in particular for the upcoming DBX crossover model which is set to be produced at the new St Athan facility in Wales, with the forthcoming model set for launch in December and to go on sale early next year.

“Our basic intention is the execution of the Second Century plan. We have some short-term headwinds and one would hope we move through this short-term correction and then carry on with what we’re doing,” said Aston Martin chief Andy Palmer.

“We’ve seen through the development of DBX so far that the efficiency of the development is much greater than it was with DB11, with far fewer design changes and far fewer needs to correct things not modelled correctly,” he said. The efficiency gained and lessons learned will be passed on to the Vanquish replacement and then the Lagondas; “We’ll take the opportunity of those learnings, but the plan remains unchanged,” Palmer said.

GALLERY: Aston Martin DBX, pre-production

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