Challenging trading conditions in Europe highlighted in November continued through the peak delivery period of December resulting in lower sales, higher selling costs and lower margins at Warwickshire luxury carmaker Aston Martin.
Core wholesales declined seven per cent year-on-year to 5,809, the company’s trading update has revealed.
Core retail sales increased by 12 per cent year-on-year and exceeded wholesale volumes leading to reduced dealer inventory and reversing the trend of the prior year.
The company expects 2019 earnings to be between £130 million to £140 million, reflecting higher than anticipated retail and customer financing support, a weaker core model mix weighing on average selling price, with a shift towards the Vantage, lower than expected wholesale volumes, higher marketing spend, particularly in the US and a late December rally in Sterling.
The company says it remains in discussions with potential strategic investors which may or may not involve an equity investment into the Company and is reviewing its planning for 2020.
Dr Andy Palmer, Aston Martin Lagonda President and Group CEO, said: “From a trading perspective, 2019 has been a very disappointing year. Whilst retails have grown by 12 per cent, our best result since 2007, our underlying performance will fail to deliver the profits we planned, despite a reduction in dealer stock levels.
“We are taking a series of actions to manage the business through this difficult period. This will include a cost saving programme alongside a focus on returning dealer stock levels to those more normally associated with a luxury company; winning back our strong price positioning is a key focus.
“The signs from the launch of the DBX are very encouraging and the order rate seen to date is materially better than for any of our previous models. Launch plans are progressing well and we are achieving all of our key operational milestones. Start of production remains on track for Q2 2020.
“Whilst we are disappointed with trading performance in 2019, our focus is now on revitalising the business, launching DBX and ensuring profitable growth in the medium-term.”