Aston Martin’s cash burn grows to $1.8 million a day as the British automaker prepares to enter another period of tough times.
Aston Martin’s cash burn problems continue to grow.
Aston Martin is no stranger when it comes to enduring tough times with financial rollercoasters becoming a signature part of its history. However, the latest round of tough times is shaping up to be a rough one for the British automaker as it burns through more cash to stay in business. Aston Martin has dealt with a cash burn problem for the past few years with the company managing to limp through the COVID-19 pandemic.
However, dwindling demand for multiple models is putting the company in a tight spot and some are questioning the company’s future especially if Aston is unable to make all the pieces of its electrification strategy fall into place.
The losses are growing
Sales of the Vantage and DB12 are rising but DBX sales have cratered while demand in China is also slipping.
The latest batch of bad news emerged last week when the British automaker revealed that it had a third-quarter loss of £10.3 million ($13.4 million) before taxes are applied. While that figure managed to beat previous estimates it’s still a bleak picture for the company with Aston burning through $509 million so far which roughly translates to $1.8 million a day. These numbers come as the company reported that demand and sales for some of its models have decreased. A prominent example is the DBX which saw its sales plummet by 52% a stark change from last year when the SUV accounted for half of all the company’s sales.
This is on top of Aston suffering from dwindling demand in the Chinese market with sales in that key region also sliding. Other automakers have also seen their fortunes in China turn for the worse but a company with the financial problems that Aston has cannot afford to have any further disruptions that will increase the pressure on it.
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Hope remains high
Aston CEO Adrian Hallmark is still optimistic saying that the light at the end of the tunnel is soon approaching.
Despite Aston’s ongoing troubles, company CEO Adrian Hallmark remains hopeful that Aston Martin is at the light at the end of the tunnel with the exec releasing a brief statement saying “Improved financial and operational performance in Q3 2024, demonstrates our strategy’s effectiveness,” Hallmark said in a statement on September 30. “We are on track to meet our revised Full Year 2024 guidance, which reflects the necessary action taken in September to adjust our production volumes given supplier disruption, which we are proactively managing, and the weak macroeconomic environment in China.”
Part of his statement seems to have some fruit when you look at other aspects of the company. Sales of the Vantage and DB12 are increasing year-over-year by 16% and those numbers should go up higher once the flagship Vanquish model begins production. In addition to those models, sales of special models like the Valour and the Valkyrie are also up too. However, this is also coming at the cost of a growing pool of debt with the company increasing its net borrowing by 50% to $1.57 billion which is higher than the value of the entire company.
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