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Losses at Aston Martin almost quadruple as Covid cuts sales

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Jasper Jolly
·2-min read
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Aston Martin Lagonda’s losses nearly quadrupled during 2020 as the pandemic hit sales just as the sports carmaker’s new bosses were starting a turnaround plan.

The carmaker on Thursday reported a £466m loss before tax for the year, compared with a £120m loss in 2019, as sales slumped and it wrote off nearly £100m of investments in now-abandoned products such as the Rapide electric car.

It also missed out on its usual marketing boost from being featured in the James Bond film franchise, after the release of No Time to Die was repeatedly delayed by the pandemic. The carmaker’s revenues slumped by 38% year-on-year to £611m for 2020.

However, the company did highlight glimmers of hope in an improved final quarter of 2020 thanks to sales of its new DBX SUV, with revenues 3% higher than the same period in 2019, before the pandemic.

Aston Martin sold 4,150 cars during 2020, a third less than in 2019. The carmaker had warned even before the pandemic struck that it would cut sales in 2020 as it tried to restore exclusivity to its brand. However, the pandemic forced temporary closures of both its factories and dealerships at varying points during the year.

The latest results mean Aston Martin has lost £638m in the three years since it listed on the London Stock Exchange, underlining the challenge still left for its management and owners to revive the company.

Lawrence Stroll, a Canadian billionaire who made his fortune with fashion investments, took control of Aston Martin in January 2020 under a £500m rescue deal. He replaced Andy Palmer as chief executive with Tobias Moers, the former boss of Daimler’s high-performance division, Mercedes-AMG.

Moers played an important role in securing a deal with his former employer, Daimler, in which it took a 20% stake in return for giving access to hybrid and battery electric technologies, reducing the need for significant investment.

Moers said “demand is strong” for the DBX, priced at £158,000, and added that the company was ahead of schedule with reducing the number of sports cars languishing in dealership. There are “encouraging signs for demand” for sports cars, he added.

Aston Martin is now planning to sell about 6,000 cars in 2021. It hopes to increase sales to 10,000 cars by 2024 or 2025, making about £2bn in revenues. That equates to a target of £500m in operating earnings before various costs.

Stroll said he was “extremely pleased with the progress to date despite operating in these most challenging of times”. He added that he was “fully committed” to the company’s plan.