Luxury carmaker Aston Martin saw its share price drop by more than 20% after announcing that its profits for this year would be lower than expected.
The company, known for its association with the fictional spy James Bond, is facing challenges from supply chain issues and decreasing sales in China.
Aston Martin sold 6,620 vehicles last year, with about 20% going to the Asia-Pacific region.
However, the company has reported a decline in demand in China, where a slowing economy has hurt luxury car sales.
Supply chain problems have also impacted Aston Martin’s ability to produce new models, leading to a plan to make about 1,000 fewer cars than initially anticipated this year.
Sales, which were expected to increase, are now predicted to be lower than in 2023.
Adrian Hallmark, the new CEO of Aston Martin, stated that “decisive action” is needed to adjust production levels.
Despite the challenges, he remains optimistic about the brand’s growth potential.
In a similar situation, Stellantis, the parent company of brands like Peugeot, Citroen, and Jeep, also experienced a significant drop in its share price after lowering its profit forecasts.
The company is struggling with weak demand in the US, where it has had to offer discounts to sell unsold vehicles. Stellantis’ shares fell more than 14% on Monday after the announcement.
This trend reflects a broader decline in the European car industry, with major companies like Volkswagen, Mercedes-Benz, and BMW also revising their profit predictions.
Sales in China, previously a key market for high-end cars, have been falling, while competition from Chinese brands is increasing.
Electric vehicle sales have also faced difficulties in Europe, with battery-powered car sales dropping nearly 44% in August compared to last year.
This decline is attributed to the removal of incentives for electric car buyers in several European countries, including France and Germany.
On Friday, EU nations are set to vote on imposing high tariffs on electric vehicle imports from China to protect local manufacturers from unfair competition.
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