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Aston Martin has blamed an earnings downgrade to US-imposed tariffs, while simultaneously urging the UK government for greater proactive support.

This manufacturer, producing its cars in Warwickshire and south Wales, revised its earnings forecast on Monday, representing the second such downgrade in the current year. It now anticipates a larger loss than the previously projected £110m deficit.

Requesting Government Support

Aston Martin expressed frustration with the UK government, informing shareholders that despite having communicated with officials on both sides, it had productive talks directly with the US administration but needed greater initiative from UK ministers.

The company called on UK officials to safeguard the needs of small-volume manufacturers like Aston Martin, which create thousands of jobs and contribute to local economies and the broader UK automotive supply chain.

International Commerce Impact

The US President has shaken the global economy with a trade war this year, heavily impacting the automotive industry through the introduction of a 25% tariff on April 3, on top of an previous 2.5 percent charge.

In May, the US president and Keir Starmer agreed to a agreement to cap duties on one hundred thousand British-made vehicles per year to 10%. This tariff level took effect on June 30, coinciding with the final day of Aston Martin's Q2.

Trade Deal Criticism

Nonetheless, Aston Martin expressed reservations about the bilateral agreement, stating that the implementation of a US tariff quota mechanism adds additional complications and limits the company's ability to accurately forecast financial performance for this financial year end and possibly quarterly from 2026 onwards.

Other Factors

Aston Martin also pointed to weaker demand partially because of increased potential for logistical challenges, especially after a recent cyber incident at a leading British car producer.

UK automotive sector has been rattled this year by a cyber-attack on the country's largest automotive employer, which led to a production freeze.

Market Reaction

Shares in the company, traded on the London Stock Exchange, dropped by more than 11% as trading opened on Monday morning before partially rebounding to be 7 percent lower.

The group delivered 1,430 cars in its third quarter, falling short of previous guidance of being broadly similar to the 1,641 cars sold in the equivalent quarter the previous year.

Upcoming Initiatives

Decline in demand comes as the manufacturer gears up to release its Valhalla, a mid-engine supercar priced at approximately £743,000, which it hopes will boost earnings. Shipments of the car are expected to begin in the last quarter of its financial year, although a forecast of approximately one hundred fifty deliveries in those three months was below earlier estimates, due to engineering delays.

The brand, famous for its roles in James Bond films, has started a review of its future cost and spending plans, which it said would probably lead to lower capital investment in R&D compared with previous guidance of approximately £2 billion between its 2025 and 2029 financial years.

The company also informed shareholders that it does not anticipate to generate profitable cash generation for the second half of its current year.

UK authorities was approached for comment.