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Aston Martin to deliver fewer cars this year as shares go into reverse

Aston Martin Vantage
Aston Martin Vantage

Aston Martin’s debt interest payments have pushed it to a deeper loss as the luxury car maker warned that renewed supply chain problems mean it will sell fewer cars than expected this year.

The luxury car maker had targeted sales of more than 6,600 this year, but said it may now sell closer to 6,200 as it struggles to source some parts.

The target reduction came as the company posted a loss for the July to September quarter of £226m, more than double the £98m it lost in the same period a year ago. Losses for the year so far have now reached £511m.

Aston Martin’s continued struggles stand in stark contrast to rival luxury marque Ferrari, which said it would surpass both its sales and profit targets for the year after a "very robust" third quarter.

Ferrari chief Benedetto Vigna said: “Today, we continue to manage an outstanding order book: with the exception of a few models, our entire range is sold out.”

The Italian car maker said it would make €5bn of sales for the year, up from the €4.9bn it expected in August.

Aston Martin has been aiming to emulate Ferrari’s success, hiring its former chief Amedeo Felisa to run the business and reducing the supply of cars to maintain high prices.

However, efforts have been hamstrung by the company’s debt pile. Deepening recent losses came as Aston Martin suffered a £245m hit from a weakening pound against the dollar. Nearly all the company’s £833m of debt is priced in dollars, making interest payments more expensive as sterling slides against the US currency.

Aston Martin recently bought back $185m of its debt in order to cut interest payments, “which will result in quite significant interest savings as we move into 2023,” according to finance chief Doug Lafferty.

The debt buyback was funded through a recent £654m fundraising, carried out in September by selling shares at a deep discount to existing shareholders and new investors such as Saudi Arabia’s sovereign wealth fund and Chinese car maker Geely.

Aston Martin has no plans to use more of the money it raised to cut debt beyond what has been previously announced, Mr Lafferty said, although he did not rule out further action.

“We need to do that in an economically efficient way,” he said.

Aston Martin sold shares to existing investors at 103p apiece in September’s discounted rights issue.

The share price sank 14pc in London trading on Wednesday to 90p, valuing the company at £633m. It was worth £4.3bn when it listed on the stock market in 2018.

Aston Martin said the margin the company makes on each car has improved and sales rose 16pc to £857m in its third quarter.

However, it is struggling to source parts for vehicles. Some of the difficulty is down to the personalisation of its cars, chief executive Amedeo Felisa said, with customers asking for various trims and modifications.

“We have already taken action in order to mitigate this kind of disruption,” he said.

Aston Martin was rescued by investors in 2020, an effort led by Canadian billionaire Lawrence Stroll. He took over as executive chairman and since then has parted ways with two chief executives.

Mr Felisa replaced former Daimler executive Tobias Moers in May. Mr Felisa was chief executive of Ferrari from 2008 to 2016.