LONDON -- Aston Martin will see a short-term financial gain from the crash in the pound’s value following the UK’s decision to leave the European Union, CEO Andy Palmer said.
The supercar maker builds all its cars in the UK and exports about 80 percent of it produces aboard. “A weak pound obviously helps our exports in terms of profit-per-unit,” Palmer told Automotive News Europe.
The value of the pound sank to 1.20 euros on Monday, down from 1.36 at the beginning of the year, and to $1.33, down from $1.47 over the same time frame. Today the pound was trading at about the same levels against both currencies.
Palmer, however, said any currency benefit could be offset by the potential imposition of tariffs on exports into mainland Europe, where Aston Martin sell about 15 percent its annual volume, and a decline in sales as a result of lower consumer confidence in the aftermath of the vote.
“There are two unknowns: What effect the shock will have on the luxury car market, and what tariffs, if any, will exist between us and the EU,” he said.
Palmer called on the government to quickly begin trade talks with the EU. “The most important thing is to calm things done. The obligation of the government is to try and negotiate tariff-free barriers into Europe,” he said.
Aston gets all its engines from Cologne, Germany, but the percentage of UK-sourced parts in its cars was high enough for the company to expect a benefit from the weaker pound for the cars it sells outside the country, Palmer said. The automaker counts on the UK for 20 percent of its sales, he said.
On Monday Aston Martin announced it had made a pre-tax loss of 127.9 million pounds ($170 million) in 2015, the fifth consecutive year the company has failed to make a profit, as the number of cars it sold fell and as it invests in expansion. In 2014, the company reported a pre-tax loss of 71.8 million pounds. The automaker sold 3,615 cars last year, down from 3,661 in 2014.
Aston Martin has been investing heavily to replace its aging lineup. The portfolio update will start with the new DB11, which will replace the DB9 coupe later this year.
Reuters contributed to this report
