Aston Martin’s DBX SUV is expected to increase car manufacturer sales.
LONDON – Aston Martin reported a larger loss in the first half and large outflows of money when the British car manufacturer invested in the launch of its first SUV, the DBX, which began reaching dealerships.
The first symptoms of China, a key sales market for DBX itself, are positive, Aston Martin said Wednesday, offering no details.
COVID-19 has meanwhile slowed the company’s efforts to reduce dealer stockpiles of its sports cars. It will delay a resumption of production at its main plant in Gaydon, England, until the end of August.
The DBX, which began producing in the quarter, will have a positive contribution in the last six months of 2020, Aston Martin said.
The company reported an operational loss of 159.3 million pounds ($206 million) in the first half and a negative money loss of 371 million pounds, as it increased spending on launch, while the coronavirus pandemic closed display rooms for much of the period.
With DBX in production, money flow is expected to improve at the time of part of the year, CFO Ken Gregor said in an interview. Overall, the business improved in June, it is too early to say whether a post-pandemic recovery is underway.
Aston Martin has struggled in the less than two years since going public, with high inventory and poor sales of its core sports cars undermining efforts to replicate Ferrari’s stock market success.
In the months since Canadian billionaire Lawrence Stroll rescued the automaker earlier this year, he announced a replacement for the CEO and said he might want to look for more funding.
The $189,000 DBX is being assembled at a plant in St Athan, Wales, built on top of the former Ministry of Defence airfield.
The automaker will enter the ultra-luxury SUV segment occupied through models such as Lamborghini’s Urus, Bentley’s Bentayga and Rolls-Royce’s Cullinan.
The company’s efforts to negotiate inventories on its other models have been thwarted by the COVID-19 crisis and will now continue until 2021, Aston said.
“We are restoring exclusivity to our sports cars,” Chairman Stroll said in a video posted on the company’s website. “Rebalancing supply to demand, which in the short term means lower wholesale volumes but necessary for future success.”
The company’s monetary balance was 359 million pounds at the end of June, with 430 million pounds of money available.
Tobias Moers, former head of Daimler’s Mercedes-AMG division, will upgrade Andy Palmer as CEO on August 1.
Moers, 54, will count on the DBX to boost sales in markets including China, where wealthy consumers’ preference to be driven by chauffeurs in roomier vehicles has helped high-priced SUVs catch on.
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