AutoBeta(AutoBeta.net)10/01 Report--

British ultra-luxury sports car manufacturer Aston Martin said on September 30th that due to the disruption of the auto parts supply chain and the weakness of the Chinese market, the performance forecast for this year will be lowered, and the adjusted profit before interest, tax and amortisation will be slightly lower than last year. And free cash flow is no longer expected to be positive in the second half of this year. At the same time, the full-year production forecast was reduced by about 1000 vehicles, due to the possible extension of production time and the delay in delivery.

Or affected by the above news, Aston Martin shares fell sharply that day, plunging more than 28% at one point; as of the close of the day, the share price was down 24.51%. Industry insiders said that after Aston Martin cut his full-year earnings forecast, investors were pessimistic about the company's prospects ‌, and the market was worried about its future development.

It is understood that Aston Martin listed on the London Stock Exchange in October 2018, hoping to improve its operations. However, life was not easy after the listing, with the share price falling 90% at one point, and poor sales led it into a deep quagmire of losses. The results show that between 2019 and 2021, Aston Martin lost 104 million pounds, 466 million pounds and 189 million pounds respectively, with a cumulative loss of 759 million pounds over three years. Its operating loss widened to 118 million pounds in 2022. In order to improve the business situation, Aston Martin successively reached cooperation agreements with Geely Holdings and the American new power brand Lucid in 2023. Among them, in May 2023, Geely Holdings's shareholding in Aston Martin increased to 17%, making it the third largest shareholder of Aston Martin. Zhejiang Geely Holdings Group Co., Ltd. (hereinafter referred to as "Geely Holdings") announced the completion of the acquisition of 7.6% of Aston Martin's shares in September 2022, becoming the fourth largest shareholder of Aston Martin.

Aston Martin was founded in March 1913 by Lionel Martin (Lionel Martin) and Robert Benford (Robert Banford), headquartered in Gayton, UK. Aston Martin announced its official entry into the Chinese market in Beijing in September 2008. three years later, Aston Martin (China) Automobile sales Co., Ltd. was established in Shanghai. In February 2016, Aston Martin and Letv signed a memorandum of understanding to establish an electric vehicle joint venture company. Aston Martin's first pure electric car, the Rapide E, made its global debut in Shanghai in April 2019. In November of the same year, the first SUV model, the DBX, went on sale in China at a price of 2.378 million yuan, and competed with Bentley Tim Yue and Lamborghini Urus after delivery the following year.

As a well-known British sports car manufacturer, Aston Martin has a history of 111 years, and it has had a brilliant period after entering the Chinese market. The Chinese market was once the fastest growing market for Aston Martin. According to the data, global sales of Aston Martin rose 82% year-on-year to 6178 vehicles in 2021, of which Aston Martin's sales in China rose 206% year-on-year, a record high. its insurance data has also become the third-largest ultra-luxury car brand in the domestic market.

But as an ultra-luxury brand priced at millions of dollars, Aston Martin's products are doomed not to be among ordinary mass consumers for a long time. So far, Aston Martin's models sold in China include DBX, DBS Superleggera, DBS Superleggera Volante, DB11 and Vantage. Aston Martin sold 149 vehicles in the first half of this year, down 71.99 per cent from a year earlier, according to the data.

According to the latest results, Aston Martin's global revenue fell 11 per cent year-on-year to £603 million in the first half of 2024 and a pre-tax loss of £216.7 million, up 52 per cent from a year earlier. In terms of sales volume, Aston Martin sold 1998 vehicles worldwide in the first half of the year, including 34 per cent in the UK, 40 per cent in the Americas, 36 per cent in the Asia-Pacific region and 72 per cent in China. As for the decline in sales in the Chinese market, Aston Martin explained that the decline in sales in the Chinese market is affected by dynamic changes in the market and the timing of the launch of new models.

On September 30th, the Aston Martin special model Valiant was officially listed in China, with a suggested retail starting price of 30.525 million yuan (including VAT), which is expected to be delivered in the first quarter of next year. However, the domestic quota of the car is extremely limited, with a global limit of 38 vehicles, which also means that the car cannot provide a lot of sales support for Aston Martin. It is understood that the car is specially designed for the track, with a 5.2-liter twin-turbocharged V12 engine, a maximum power of 745 horsepower, a maximum torque of 753 Nm, and a transmission system that matches a six-speed manual transmission.

Generally speaking, as a century-old ultra-luxury car brand, Aston Martin has a longer history than Ferrari, Lamborghini, Maserati and other brands, but since its establishment in 1913, Aston Martin has changed hands many times. After seven bankruptcies, the development is very tortuous, of course, the main reason is financial difficulties. From the perspective of the Chinese market alone, the shrinking sales of Aston Martin in the domestic market has a lot to do with the price war in the domestic car market and the intensification of competition in the domestic self-brand luxury new car market.

Of course, Aston Martin's performance in the domestic market is only a microcosm of many ultra-luxury brands. Take the latest sales data of imported ultra-luxury brands as an example. From January to August this year, sales of imported ultra-luxury brands were 4291, down 49 per cent from a year earlier; in contrast, they fell 12 per cent to 11900 in the same period. Among the subdivided brands, including Bentley, Maserati, Ferrari, Rolls-Royce, Lamborghini, Aston Martin and McLaren, sales fell by more than double digits in the Chinese market, with McLaren plunging 88% and Maserati down 74% from a year earlier. It is undeniable that in the past few years, ultra-luxury brands have indeed shown a trend of continuous growth, but with the continuous strength of China's automobile industry and the continuous innovation of domestic luxury models, domestic ultra-luxury car brands are generally facing the problem of declining sales, especially this year.

Aston Martin had previously said it would achieve positive free cash flow this year and a gross profit margin of more than 40 per cent. However, judging from the current situation of Aston Martin, it is clear that this goal can not be achieved. "it takes near-perfect execution to achieve the 2024 plan," Aston Martin's new CEO Adrian Hallmark said in a statement. "however, Aston Martin now needs to act quickly to adjust production in 2024."

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