Shares in Aston Martin plunged 17 percent on Wednesday after the luxury British carmaker slumped to a half-year loss, the latest automotive firm to be hit by falling demand in Europe.
Aston Martin, best known as James Bond’s favorite marque, has been undergoing a turnaround plan since Chief Executive Andy Palmer took over in 2014, designed to renew and boost its model line-up and move into new segments. The plan led to an autumn 2018 stock market flotation.
But its shares have since fallen by around three quarters from their 19 pounds float price to below 5 pounds, hit most recently by the group’s weak performance in Europe, the Middle East, and Africa, where half-year demand fell by nearly one-fifth.
The group posted a pretax loss of $96 million in the six months through June.
“We are disappointed that our projections for wholesales have fallen short or our original targets, impacted by weakness in two of our key markets as well as continued macro-economic uncertainty,” Palmer said.
Overall wholesale demand grew by 6 percent in the first six months as the group posted strong increases in the Americas and Asia, but a decline in Britain and the rest of the continent prompted the carmaker to cut its full-year forecast.
Aston has also been hit by expansion costs as it builds a new factory in Wales to make its first sport utility vehicle, and a lower average selling price.
The company said that if it requires some additional financing it would pursue the funds from sources such as the debt markets.
The global car industry has been hit by weakening demand in China and a drop in demand for diesel vehicles in Europe, as well as the cost of electrification.
Nissan reported plunging profits last week and said it would undertake its biggest restructuring plan in a decade, axing nearly a tenth of its workforce.
But 106-year old Aston also faces the risk of a disorderly Brexit disrupting its wholly British production, as delays at ports due to new bureaucracy could slow down the movement of vehicles and components.
“We do not want a no-deal Brexit because of the disruption that that causes to issues at the border,” said Palmer.