Aston Martin cuts US exports amidst tariff uncertainty

Aston Martin Lagonda has decided to scale back its exports to the United States as it keeps a close eye on the effects of American tariffs on luxury vehicle demand. The carmaker, known for its high-performance sports cars, has taken a cautious approach in response to the evolving situation under the current trade policies. The company has opted to limit its shipments to the US, instead relying on the existing stock held by its American dealerships.

The United States remains a core market for Aston Martin, accounting for approximately one-third of its global sales volumes. Despite this significance, the uncertainty surrounding tariffs has prompted the carmaker to reevaluate its operations. Chief Executive Adrian Hallmark noted that the company would balance its strategy between absorbing and passing on the financial burden of these tariffs to protect its profitability while managing customer pricing sensitively.

Analysts have observed that Aston Martin strategically increased its shipments to the US before the tariffs were implemented. This pre-emptive move has allowed the company to avoid making adjustments to its annual sales guidance, bringing some reassurance to investors. However, continued uncertainty has resulted in volatility for the company’s share price. After a brief recovery earlier in the trading week, shares dipped by 3.6 per cent to close at 67.25p on Wednesday.

In its first quarter of 2025 results, Aston Martin revealed mixed financial performance. Despite a minor increase in volumes to 950 vehicles, revenue fell by 13 per cent to £233 million. Profit margins dropped significantly, from nearly 38 per cent to 27.9 per cent, with the decline attributed to reduced sales of bespoke customised models, which traditionally command higher premiums.

The company also reported rising operating losses, which reached £67 million for the quarter, compared to £58 million in the same period last year. Although financing charges and accounting adjustments helped halve its pre-tax losses to £79 million, cash outflows remain a pressing concern. Aston Martin burned through £120 million in cash during the quarter, reducing its cash reserves sharply and pushing net debt to a new peak of £1.26 billion.

Other European carmakers, including Mercedes-Benz and Stellantis, have also issued warnings about the potential impact of American trade tariffs. Analysts note that while Aston Martin’s wealthy customer base is less price-sensitive, prolonged uncertainty around pricing and tariffs could deter some buyers from proceeding with purchases until clarity is reached. The global luxury car market remains on edge as businesses adjust their strategies to navigate this unpredictable economic environment.