Shares in Stellantis and Aston Martin tumbled after carmakers issued profit warnings by Investing.com

Investing.com — Shares of Paris-listed Stellantis (EPA: ) fell and Aston Martin Lagonda ( LON: ) shares fell in London on Monday after both carmakers issued profit warnings due to sluggish demand in China.

In a statement, Stellantis said it now expects to report an adjusted operating income margin for 2024 of between 5.5% and 7.0%, down from a previous estimate for “double digit” growth.

About two-thirds of the reduction is due to “corrective actions” in its North American operations, Stellantis said. The Franco-Italian group also cited fierce competition from electric vehicles in China — the world’s largest auto market — and a “deterioration in global industry dynamics.”

“Other contributors include lower-than-expected sales performance in the second half of the year in most regions,” the company said.

Industrial free cash flow is also seen falling from negative €5 billion to negative €10 billion, compared to earlier indications that the figure would be “positive”. The revision stems from the lower outlook for adjusted operating income as well as the impact of “increased temporary work capital” in the second half of 2024, Stellantis said.

Stellantis, which was created by the merger of Fiat Chrysler and France’s PSA in 2021, saw its share price fall by more than 12%.

Elsewhere, Aston Martin Lagonda warned it does not expect to report positive free cash flow in the first half of the year.

The sports carmaker also lowered its wholesale volume target for 2024 as it grapples with supply chain challenges, including the late arrival of key component parts.

Aston Martin added that it also faced “weak demand” in China, although it said the country presented a “significant market opportunity (…) as its macroeconomic environment improves”.

Full-year adjusted earnings before interest, taxes, depreciation and amortization are now seen in the “high-teens,” below its previous estimate in the “low 20%.”

“It has become clear that we need to take decisive action to adjust our production volumes for 2024, given a combination of supplier disruption, the weak macroeconomic environment in China and a proactive decision to strategically realign our production plans to optimize efficiency. and achieve a more balanced delivery cadence going forward,” Aston Martin CEO Adrian Hallmark said in a statement.

Aston Martin shares lost more than 28% of their value in morning trading.

The announcements come after German automakers Volkswagen (ETR: ), Mercedes-Benz (OTC: ) and BMW (ETR: ) downgraded their financial outlooks earlier this month due to weakness in China.

Meanwhile, analysts at Stifel downgraded Porsche Automobil Holding, a major shareholder of VW and Porsche AG, to “Hold” from “Buy.”