Aston Martin said revenue will continue to slide as it braces for the impact of the coronavirus outbreak on Chinese demand for the DBX SUV.
Aston Martin warned Thursday sales will slump in the first six months of 2020, with almost all earnings coming in the second half once the English company starts deliveries of the DBX, a model on which its relying to double output.
Aston Martin CEO Andy Palmer said the DBX is selling well, with orders already ahead of the planned retail target for 2020. At the same time there are concerns about the impact of the China epidemic, since the country is regarded as prime sales territory for the automaker’s first SUV.
“China is an important region for us,” Palmer said in a phone interview. “The release into China is quite late in the year, so we’ll hope and pray that the virus is done by then.”
Aston shares have spiraled downward since lthey debuted in 2018, with the company hurt by Brexit and sluggish sales of the entry-level Vantage model. It last month resorted to 500 million-pound ($645 million) in fundraising to shore up the balance sheet, including a rights issue and an investment from Canadian billionaire Lawrence Stroll, who will become executive chairman.
China is Aston Martin’s fastest-growing market and the DBX is viewed as key to boosting sales since roads there can be poor and wealthy individuals often prefer to be chauffeur-driven, making an SUV a better match than a sports car.
Excluding the DBX, wholesale deliveries are expected to be “materially lower” than last year as Aston Martin focuses on reducing inventories that have pushed down prices. Palmer said it’s vital that the company better match supply and demand, and that it must “take the medicine and get it done.”
Aston Martin swung to an operating loss of 37 million pounds last year as revenue slumped 9 percent. It said CFO Mark Wilson will step down in April 30 by “mutual agreement.”