If most luxury car manufacturers are showing iron health, this is not necessarily the case for Aston Martin, and most worryingly, this has been going on for several years.

Nevertheless, 2022 could be a turning point for the Gaydon firm, with some encouraging results. Despite the fact that Aston Martin’s losses in 2022 almost tripled (net loss was 528.6 million pounds against 191.6 million a year earlier), despite the increase in sales, the manufacturer still emphasized. improving gross margins and showing optimistic forecasts. It is enough for the stock to jump by 15% after this announcement.

Aston Martin is at the center of the crisis

But why is Aston Martin losing even more money when it sells more cars? There are many reasons, but one of the main ones, and it applies to almost all manufacturers, it is an explosion of production, marketing, distribution, administrative and financial costs.

Aston Martin also points to capital spending (particularly electrifying its model range) or depreciation charges, as well as supply chain issues and logistical disruptions, particularly in the second and third quarters.

This rise in costs is also linked to the British economy, which is particularly vulnerable after Brexit and where Aston Martin still manufactures its cars. The UK is also experiencing labor shortages in the logistics sector.

The order is in order

For its part, turnover increased by 26% to £1.38 billion thanks to higher selling prices and a favorable exchange rate effect from the weaker pound, which mechanically increases non-UK revenue when converted into the UK currency. In the last financial year, the group’s liquidity increased and debt fell to 766 million pounds at the end of 2022, from 892 million at the end of 2021.

“Despite a challenging operating environment, we finished the year with improved growth and profitability, as well as positive cash flow in the fourth quarter and our best backlog in years”– commented the executive chairman of the board of directors, Lawrence Stroll. “In 2023, we expect a clear increase in profitability within one year due to improved volumes and margins”he adds.

In 2023, with an improving economic context, Aston Martin hopes to sell around 7,000 cars this year (compared to 6,412 in 2022) and increase operating profitability to 20%. Its SUV, the DBX, should allow the manufacturer to achieve this goal quite easily. The arrival of several Aston Martin hybrids over the next few years should also allow the brand to increase sales.