Aston Martin Share Price Falling – Here’s Why
When it comes to automotive enthusiasts, Aston Martin is a brand that evokes strong emotions. It has long been associated with luxury and exclusivity, making it a favorite among the wealthy. However, the latest news has not been so good for this British automaker. In recent months, the Aston Martin share price has been on a downward spiral, leaving many investors bewildered and worried. In this blog post, we will explore why Aston Martin shares are falling and what it means for the future of the company.
Reasons for Aston Martin Share Price Falling:
1. Lower than Expected Sales:
One of the primary reasons for the fall in Aston Martin share price is lower than expected sales. Despite launching new models such as the DB11, Vantage, and the DBS Superleggera, the company has not managed to generate the kind of sales figures it was expecting. This has led to a sense of disappointment among investors, who were hoping for better returns.
2. Increased Competition:
Another factor that has contributed to the decline in Aston Martin’s share price is the increased competition from other luxury automakers. Companies such as Ferrari, Lamborghini, and McLaren have also been launching new models and capturing market share, making it difficult for Aston Martin to stand out in a crowded market. This has put pressure on the company’s sales and profit margins.
3. Brexit Uncertainty:
The uncertainty surrounding Brexit has also had an impact on Aston Martin’s share price. The UK’s decision to leave the European Union has created a sense of unease among investors, who fear that it could hurt the UK automotive industry. Since Aston Martin is a British company with a significant portion of its sales coming from the EU, any negative impact on the UK economy could hurt the company’s bottom-line.
4. Debt Burden:
Aston Martin was heavily leveraged even before it went public in 2018. The company’s debt pile has grown to over £880 million, leading to concerns about its ability to service it. High levels of debt indicate that the company may struggle to finance its future growth plans, leading to a bleak outlook for investors.
What Does the Future Hold for Aston Martin?
While there is no immediate solution to the problems facing Aston Martin, the company has taken steps to address some of the underlying issues. In September 2019, the company appointed a new CEO, Tobias Moers, who comes with a wealth of experience from his time at Mercedes-AMG. Moers has been tasked with turning around the company’s fortunes by focusing on product development and operational efficiency.
Also, the company has announced plans to launch its first SUV, the DBX, in 2020. The DBX is a crucial product for Aston Martin since it represents the company’s entry into the highly lucrative SUV market. If successful, it could provide a much-needed boost to the company’s sales and help improve investor sentiments.
To sum up, the reasons for Aston Martin’s share price falling are multi-faceted. Investors remain concerned about the company’s ability to generate the kind of returns that can justify its valuation. However, with a new CEO in place and plans for new models such as the DBX, there is hope that Aston Martin can turn things around. Ultimately, only time will tell how successful the company will be in overcoming these challenges and returning to its glory days.