United Kingdom luxury sports car manufacturer Aston Martin lowered its performance expectations for this year on Monday due to supply chain disruptions and soft demand in China.

The company's stock price in London fell by 12% in early trading on Monday, marking the largest drop since May 1st, with a decline of 37% so far this year.

Aston Martin stated on Monday that it expects annual sales to decrease by about 1,000 vehicles compared to previous estimates. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITA) will be slightly lower than last year's level, and no longer expects positive free cash flow in the second half of this year.

The entire European auto industry has recently been lowering performance targets. Following Mercedes-Benz and BMW, Volkswagen also lowered profit expectations last Friday due to declining demand in China. Stellantis also reduced its full-year profit margin expectations on Monday.

This adjustment by Aston Martin is the first action taken by the new CEO Adrian Hallmark. Hallmark, who was previously the CEO of Bentley Motors, just took office this month with the task of changing Aston Martin's fate.

The company also stated on Monday that it will not be able to achieve the previously set 40% gross margin target for this year.