10:39 am, October 1, 2024
Fiat owner Stellantis and Aston Martin both saw shares sink after warning over weaker profits amid pressure from cheaper rivals in China.
They become the latest car manufacturers to downgrade profits in recent weeks, following BMW, Mercedes-Benz and Volkswagen.
The latter issued its second profit warning in three months on Friday.
Aston Martin’s announcement said it needs to take the ‘decisive action’ to slash its car production for 2024.
The British listed car manufacturer says it is suffering from supplier disruption meaning delays to parts and weak demand for its vehicles in China.
Shares in Aston Martin plunged by 24% following the news on Monday (September 30) that it would cut its planned production by around 1,000 cars for this year.
Previously it had predicted high single-digit volume growth but it has now said it expects volume to be down by a ‘high single-digit percentage’.
Aston Martin’s new chief executive Adrian Hallmark said: ‘It has become clear that we need to take decisive action to adjust our production volumes for 2024 given a combination of supplier disruption, the weak macroeconomic environment in China and a proactive decision to strategically re-align our production plans to optimise efficiency and achieve a more balanced delivery cadence in the future.’
The group explained that the parts delays had hit at a time when it was adding more models, stating: ‘Concurrent with the significant ramp-up in production for the second half of the year, following new model introductions, the company is experiencing a growing number of late component arrivals due to disruption at several of its suppliers.
‘As a result, an increasing number of vehicles are taking longer to complete, with these issues impacting the efficiency of its operations and delaying the delivery of its vehicles.’
Shares at Stellantis, owner of Fiat, Peugeot and Citroen, fell 15% after it said operating profit margins would be 5.5% to 7% rather than the originally announced 10%.
It also said that free cash flow would be negative, from £4.2bn (€5bn) to £8.4bn (€10bn), rather than the previously positive figure.
The group said in its statement: ‘The company will continue to leverage and expand its competitive differentiators and believes that the recovery actions being put in place will ensure stronger operational and financial performance in 2025 and beyond.’
