The smooth drive to profitability, as well as to an electrified future, remain further down the road for Aston Martin Lagonda after it revealed that it had missed its already downwardly revised production targets for 2023.
However, Lawrence Stroll, its executive chairman and significant shareholder, insisted that the luxury carmaker was on track to “substantially achieve” its long-promised financial targets for 2024.
Hit by production delays in the launch of the £185,000 DB12 sports car, Aston Martin reported 6,620 deliveries of vehicles to dealers last year. That was below a revised target of 6,700 and was nearly 5.5 per cent shy of the 7,000 it had been promising up until last November.
Aston Martin, which has shrunk its annual losses but remains heavily in the red and with net debt again on the rise, is also delaying the launch of its first electric car because of a lack of consumer demand. The company is now targeting the launch of its battery electric vehicle in 2026, a year later than planned, becoming the latest carmaker to push back electrification goals as investment in capacity and technology has outpaced consumers’ demand for such models.
“The consumer demand [for battery electric vehicles], certainly at an Aston Martin price point, is not what we thought it was going to be two years ago,” Stroll, 64, said. He added that there was “much more driven demand” for plug-in hybrid vehicles, especially for a company such as Aston Martin, as people “want some electrification but [to] still have the sports car smell and feel and noise”. Valhalla, Aston Martin’s first hybrid supercar, is on course to enter production this year.
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Buoyed by the sale of one-off limited edition supercars, average selling prices across all Aston Martin models in the last months of the year hit £255,000, against an average of £201,000 for the whole of 2022 and prompting group revenues to rise by 18 per cent to £1.6 billion. It reported underlying operating profits, stripping out tax, interest and other costs, of £305 million, up by 61 per cent year-on-year.
Ever since Stroll rescued Aston Martin in 2020 after its disastrous 2018 float, the Canadian clothing billionaire has promised that by 2024-25 the company would be making profits before deductions of £500 million on £2 billion of annual sales. Indeed, the tycoon reiterated: “We remain on track to substantially achieve our 2024-25 financial targets in full year 2024.”
Doug Lafferty, Aston Martin’s finance director, said the company expected to hit the £2 billion revenue target with a “high-single-digit percentage volume growth”, coupled with an additional 15 per cent increase in average selling prices this year.
Adding back in interest costs, tax and other charges, Aston Martin reported a bottom-line loss of £239 million for 2023, on top of the £495 million lost in 2022. That takes accumulated losses in the past four years to £1.4 billion. With cash outflows in the year of £360 million, up from £299 million in the previous year, Aston Martin’s much-reconstructed balance sheet is showing net debt rising again to £814 million from £766 million.
Shares in Aston Martin, which have halved in price since last summer and which have been trading at 12-month lows of late, rose 7p to 183½p, an increase of 4 per cent.
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● Production at Britain’s car factories has continued to pick up from multi-decade lows. Nearly 83,000 vehicles rolled off assembly lines in January, a year-on-year rise of 21 per cent, according to the Society of Motor Manufacturers and Traders.
