Mixed bag for luxury car firms as Aston Martin struggles while Rolls-Royce soars
Aston Martin has warned that it will miss its profit targets after tough headwinds continued into December, a key month, even as fellow luxury car-maker Rolls-Royce posted a record year.
The business said that “challenging trading conditions” it flagged up in November have not eased and, as a result, it has registered fewer sales, higher costs for selling each vehicle, and lower margins.
Aston Martin chief executive Andy Palmer said: “Our underlying performance will fail to deliver the profits we planned, despite a reduction in dealer stock levels.
Earnings before interest, tax, depreciation and amortisation (Ebitda) is now expected to be around £130 million to £140 million, the company said.
On top of having to support customers to finance their buys more than expected, Aston Martin was also hit by a jump in the value of the pound after December’s general election.
Dr Palmer said: “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.”
Aston Martin’s troubles put it in stark contrast to fellow luxury brand Rolls-Royce, which sold more cars last year than at any point in its 116-year history.
It exceeded 2018’s record of 4,107 cars, to sell 5,152, a 25% jump.
Both brands launched new SUVs over the period, with Rolls-Royce’s Cullinan making a “major contribution” to growing sales. Aston Martin’s new DBX showed “very encouraging” signs after launching earlier in the year, according to its boss.
Rolls-Royce chief executive Torsten Muller-Otvos said: “This performance is of an altogether different magnitude to any previous year’s sales success. While we celebrate these remarkable results, we are conscious of our key promise to our customers – to keep our brand rare and exclusive.”
However, he warned that the growth may not last into 2020, as sales of the Cullinan stabilise.
Rolls-Royce cars were sold at record rates in Russia, Singapore, Japan, Australia, Qatar and Korea, the company revealed. It has 135 dealerships worldwide.