By on September 25, 2006

bondaston.jpgIn 1984, an inebriated Henry Ford II met Victor Gauntlett in a London bar. Gauntlet controlled Aston Martin, a venerable British manufacturer of race cars and gentlemen’s sports sedans. Aston's sales were in the tank and there was no money to develop new models. “For a lousy $15 million, I’d sell the whole thing” Gauntlett said. Ford looked at his drinking buddy Walter Hayes and said, “Wouldn’t that shake ‘em up back in Dearborn?” In ’86, Ford bought 75% of Aston’s shares. In' 94, they bought the rest. Despite the fact that FoMoCo's investment has just come right, it's auction hammer time. So what's next for Aston?

Ford spent billions remaking Aston Martin into a modern car company, complete with reasonably reliable products and a up-to-date design, development, production and distribution process. Aston’s financial and manufacturing problems were resolved, and a few outstanding cars produced. The DB9 and Vanquish, for example, are worthy successors to the DB5’s and 6’s favored by Britain’s most famous (if fictional) spy. This year, after forty years of red ink, Aston finally turned a profit. 

Although the brand gained profitability, something was lost in translation: exclusivity. Last year, Aston Martin sold 4500 vehicles. The company's latest model, the Vantage V8, clocks in at a relatively inexpensive $110k. What’s more (lots more) the company plans on producing 3000 examples of their “baby Aston.” This is exactly the sort of over-reaching brand extension you’d expect from the folks who tried to sell the world a Jaguar that’s a lightly dressed Ford Mondeo and a Lincoln Zephyr that’s nothing more than a tarted-up Ford Fusion. Ford has amply demonstrated that no one in the company save Alan Mullaly (owner of the new Lexus 460) truly understands luxury cars and their rich customers.

Now that Aston Martin is on the block, its new owners should note that the brand’s revival is a relatively simple matter. All that’s required is a quick and decisive return to the upper stratosphere. First, the Vantage V8 should be retired. While car critics have welcomed the model with open arms (aside from our Mr. Shoemaker), there is no evidence that any of these reviews have been written by an enthusiast with an annual income of at least $1m and/or assets above $20m (aside, perhaps, from our Mr. Shoemaker). In a world of affordable Mercs, Bimmers, Bentleys, Maseratis and Porsches, Aston Martin should stand above the fray as an obscure object of desire. In other words, it should be REALLY expensive.

To that end, Aston Martin should take the DB9 ($165k), Rapide ($200k est.) and the Vanquish ($255k) even further upmarket. Ferrari regularly markets cars that cost twice as much as a DB9, and sells every one, often years before they get around to making them. The recent Zagato coupe and the upcoming DBS (only 300 due to be built) are perfect examples of the "car too far" the company should produce. A $500k Aston (or 50) would draw wealthy pistonheads to Aston showrooms like moths to a flame-surfaced BMW.

Next, the moth-eaten showrooms must be upgraded. To their credit, Aston Martin has started to upgrade their dealerships to yacht purchasing levels. But too many Aston showrooms are still annexes to the local Jaguar dealer. Asking multi-millionaires to rub shoulders with plumbers who just bought a $30k Jaguar is simply not on.

Aston Martin should also exploit their heritage. Their rich racing history seems to have been completely forgotten during the Ford years. The Royal connection also needs more play. Prince Charles might be perceived as a bit of an old Fuddy Duddy by young people, but Aston buyers aren’t generally young, and Aston’s Royal Warrant is a literally invaluable marketing tool.

Ressurecting Lagonda is the final part of the Aston Martin revival strategy. Although I recommended killing the V8 Vantage, it could serve as the first Lagonda. A Lagonda that catered to low-end luxury sports car buyers could help preserve Aston Martin's identity as a truly aspirational brand. The marketing strategy worked well enough back when LaSalle introduced less affluent customers to the Cadillac aura, without sullying the Cadillac brand. Today's Maserati is a stepping stone to Ferrari, just as the LaSalle primed buyers for the leap to a Cadillac. A Lagonda to Aston transition would work a treat, for both. 

Ford is reportedly asking $1 billion for Aston Martin. Another valuation, 100 times earnings, would value the English car brand at $1 million. For a price somewhere in between, and a billion or so in additional investment, savvy investors could return Aston Martin to its upmarket roots, beat Ferrari at its own game, merchandise for millions and show Ford exactly what they pissed– I mean, missed.

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23 Comments on “Aston Martin RX...”

  • avatar

    Interesting article but I think some of the logic is flawed. First off, I think the V8 Vantage has been a success ( certainly looking at the premium asked for models in the UK ). But it is the strategy of moving Aston further up market above Ferrari which I think would be distastrous. As BMW have found with Rolls Royce, the market for $400,000 + cars is very small, and, certainly for BMW, not profitable and this is with a very well known luxury brand. Even with Ferrari, the bulk of their sales are for 430’s and not the 12 cylinder cars. Also, if they restricted their sales to say 1,000 cars at about $400,000 each ( and that is being very optimistic ) then you are looking at a company with a turnover of $400M a year – who is going to put $1 Billion of investment into that, as suggested. Morevoer, the end product would probably be no better than what they have at the moment, as the fixed development cost would have to spread over far fewer cars. I think it is silly to say that production of 3000 units per year is over stretching the brand – with growing new markets in China and the far east, I have heard that Ferrari is considering raising sales to 7000 units per year and, despite all the tat and rubbish they now sell with a prancing horse on it, the brand is still super premium. Yes Ferrari can chuck out the odd job lot of Enzo’s and F40’s and probably make a profit on them, but even they realize that they can only do this every 5 to 10 years…. Aston have come a long way over the last 5 years, and the mere fact that their currenty strategy is finally yielding a profit for the brand says a lot for it correctness. Let them carry on what they are doing…

  • avatar

    Moving up market may be a wise move for Aston, but can it afford the R&D costs involved? Because just doubling the price I don’t think would do, or at least not in the long term. While they can fool a couple of rich guys, in the end I doubt those will be very happy finding out they’ve just spent $400,000 on a pimped-up Ford.
    So, if they want Ferrari prices, they should offer Ferrari performance and status, and that certainly comes at a cost.

  • avatar

    $150k seems to be the new sweet spot in the high end market.
    I don't see any reason why Aston can't wail on that AND go further upmarket from time to time, like Ferrari.

    At the end of the proverbial day, Aston needs to make sure their products are actually good enough to wear the badge. Jay Shoemaker's review of the new Vantage suggests a little evolution is in order.

  • avatar

    Well written, but wrong.

    1. Move to upmarket – See comment #1.

    2. Showroom upgrade – I will take you word for it. Although no data source presented. Wikiality I guess.

    3. Stepping stones – Maserati isnt a stepping stone to Ferrari anymore and neither is LaSalle for Cadillac. Maserati was bought by Alfa Romeo and is no longer under Ferrari’s control. We all know how well brand engineering works.

    4. Racing heritage exploitation – What are you proposing Aston do here? You are not very clear.

    5. Charles connection – See point 4.

    6. Return to roots – What roots are you talking about? If you were clear on this…

    **7.** My main point – If Aston is turning profits, why do they need a prescription. I dont get it. Do you forsee future losses? I dont.

    Flawed article. Atleast better than the Minneapolis roadway sleepfest.

  • avatar

    Doesn’t make much sense to me either. They are one of the few american owned car companies that seem to be doing most things right. I can’t imagine selling cars for far higher prices will increase profitability. Their is a lot of competition in the $300-$1000k range. They would need to come up with something akin to a veyron and I would imagine the cost of r&d would take out all their profits. A pretty big gamble for not such a sizable return. However, they could add a little variety to their styling. All their models look pretty much the same right now.

  • avatar
    Jonny Lieberman

    I’m curious why you say their racing history has been forgotten? As the DBR9 racer is tearing (and burning it’s carbon ceramic brakes) all over the place, including Le Mans.

    And the car has been pretty succesful, too.

  • avatar

    I’m with the others so far. I don’t see the V8 harming Aston, but I DO see the lack of updates to the Vanquish doing so.

    Lagonda? No real name heritage there except for the big 4-door from the 70’s that was a technologiacl nightmare, as the Top Gear folks have said.

    Theres does need to be more visual differentiation between the V8 and the DB9, becasue I’d hate for someone to mistake my V12 DB9 for a mere V-8 Vantage. (As if I could afford either one…)

    They do need to play more on their heritage, including not only the Bond DB5, but also the DBR-1 and the Zagato coupes.

    As it is, I think Aston is right where it should be. They’re not trying to build Ferraris nor Mercedes nor Maseratis, but are focuising on building British cars. That’s good.

  • avatar
    Jay Shoemaker

    First thing I should mention is that I actually bought a DB9 Volante last year, albeit I purchased it for my boss. It was an unsatisfying ownership experience- within a week of ownership the battery went dead (that’s why they supply a trickle charger as standard equipment) and guess what? The battery is in the trunk and the trunk is electrically operated! There were lots of similar anecdotes. I sold the car in the last few weeks at a substantial loss.

    The issue with Aston isn’t that it needs to cost more but it needs to drive, perform and operate better. The BMW 335 Coupe will outperform the DB9 is every respect, which undermines the Aston’s supercar status and long term desirability. For too long Aston’s have been more about the look than performance and while the new regime has made improvements to the marque, there is a still a ways to go before they can hold their heads level with Ferrari.

  • avatar

    It would be a shame if Aston were to become another Ferrari. The allure of Ferrari is not in the performance, but in the delivery of that performance. The performance argument is somewhat flawed in that a Z06 at $50k outperformes just about everything else on the road. You need to go north of $100k to get equivalent performance elsewhere. A lightly modded Z06 will run away from a 430 all day long at less than half the cost. But that isn’t the point, for Ferrari or Aston. Aston needs to delivery the performance like an Aston, not like a Ferrari.

  • avatar

    I don’t think anyone should be too surprised by the unreliability of the new Astons. Launching a new car, especially a sport car, is a very complex business, involving the management of many teams of suppliers, engineers, designers etc… The more often you do this, the better you get at it. Before the launch of the Vanquish, Aston had pretty much launched 1 car – the DB 7 – in about 12 years.

    They then tried to launch, in quick succession ( for Aston ) the Vanquish, DB9 and V8, all at a time when their bosses PAG and Ford were loosing money ( and therefore I am sure keeping a very tight hold on budget ).

    The fact that the things even move is, in my view, almost a miracle, but if you are looking for reliability and thought thru engineering, buy a german car…

  • avatar

    I can’t imagine a move upmarket would make a practical difference. Firstly, they’re already selling a $255,000 car; as you move upmarket from there, you’re essentially dealing with the same people, but fewer of them. Someone who can spend $255k on a car probably could spend $300k or $400k, but is choosing not to; describe to me the financial statements of a person who can just only afford $255,000 and the consequent maintenance, but for whom $300k would have broken the bank.

    Second, shouldn’t we keep in mind that Porsche did not become the world’s most profitable auto manufacturer on the many merits of the 911 Turbo or Carrera GT, but on vast sales of the base, non-S Boxster. And Ferrari, the byword for exclusivity, is not exactly in competition for the “Most Profitable” title, nor have they ever been. I can see no link between being extremely upmarket and exclusive and profits.

  • avatar

    I recently bought a Maserati after considering Aston among others. The dealership comment is spot on.

    My local Maserati dealer was dedicated to Maserati – well, okay, they also sell Ferarris, but the two parts of the dealership are complementary and reinforce each other. No would-be Maserati buyer resents the Ferraris in the showroom.

    My local Aston dealer was basically a room off the side of a Jaguar dealership. They had one car in inventory. It just didn’t work. Anyone considering this type of car wants the buying experience to be as special as the driving experience.

    Oh and by the way writing of driving, maybe Aston should take a look at their handling a bit. Sure the car is a rocket in a straight line, but how does it handle those winding roads? The Maserati stays glued to the road and gives a feeling of confidence. The Aston feels like it will fly into space at any moment. I am not a race car driver but I like pretending I am :)

  • avatar
    Jonny Lieberman

    Ole: Which Maser did you get?

  • avatar

    A few points:

    – The luxury market is no longer driven by exclusivity, it is driven by indulgence. Nobody lusts for a car just because it is one of only a handful; they lust for a vehicle because it has a particular appeal and they want to satisfy that desire. Even so, at full tilt production, it isn’t like Aston is going to break 7k units annually, so the brand will always have that cachet.

    – Low production volume vehicles are buggy vehicles. Remember, Aston is the same company that couldn’t even provide the press with a working Vantage gearbox. Making a low-volume car that still embodies production vehicle engineering refinement is vastly more expensive then most people think.

    – Aston needs to shake the British industrial cruft that it currently has. The company is big on ideas, big on hubris but short on performance, engineering refinement or well thought design. I don’t know what it is about old school British companies and having a lot of attitude while selling a product that is behind everyone else (the embodiment of this can be found in RF’s review of the Bristol).

  • avatar
    Jonny Lieberman

    gakoenig: About your first point, I disagree. Admitting that I live in Fantasty Land, I have to admit that Bently has shot itself in the foot.

    The Bentely GT is EVERYWHERE, and everyone of them is jacked up on 24″ wheels. Just… not classy.

    However, I saw a jet-black DB9 the other day, and nearly crashed my car trying to gawk.

    Likewise, a Maserati Quattroporte (produciton of which is intentially capped to preserve exlcusivity) also makes me do funny things in the car.

    Same goes for the Rolls.

  • avatar

    Shooting yourself in the foot has very little upside where as Bentley at least has boatloads of sales and a Phoenix-like brand resurrection which can be attributed to the Continental GT. Has the GT lost it’s lusty exclusivity? Sure, but that doesn’t seem to bother the 8-9 thousand plutocrats and media whores who pay out to own one every year.

    Even so, what is to keep Aston and Bentley from having a two-tier brand? Lambo seems to pull this problem off with great success- the Gallardo has been very well received and can be had for a relative bargain where as the Murcielago remains the lust-inducing street enigma.

    I think BMW should buy Aston. Combine those lusty looks and English pomp and circumstance with BMW driving dynamics and engineering prowess and you would have one hell of a company/brand on your hands.

  • avatar

    I think BMW should buy Aston. Combine those lusty looks and English pomp and circumstance with BMW driving dynamics and engineering prowess and you would have one hell of a company/brand on your hands.

    & they could merge it with Rolls & Mini to be the biggest manufacturer of Brittish autos. Right. Problem is that it would end up being Bangleized.

  • avatar
    Terry Parkhurst

    When I was in Reno this year to cover the collector car auction during Hot August Nights, there was a Maserati Quattroporte parked in front of The Atlantis. I believe that the owner was there, not just to gamble, but for the car-related activities of HAN. And the car didn’t look out of place, because the Quattroporte, perhaps more than the coupe, has its own sense of style, its own personality, if you will.
    The V8-powered and in-line 6 powered Aston Martins are too derivative of Jaguar to light anyone’s sense of passion. In the 1960s, there was a saying: do your own thing.
    It will likely be a bit of an adjustment for Aston-Martin, assuming someone does buy them from Ford. But it will rapidly become a classic case of sink-or-swim. In either case, enthusiasts will benefit. If Aston-Martin goes away, there are still a lot of great vintage ones around.

  • avatar

    Plumbers buy Jaguars?

  • avatar

    My father was audited recently and one of the IRS agents drove a Jaguar S Type and the other drove a BMW X5. You do not need to be wealthy to afford a luxury car nowadays.

  • avatar

    I too am baffled by this article. Aston Martin has been transformed from a cottage-industry manufacturer relying heavily on their past glories and Jaguar’s spare parts, eking out just enough to survive year after year, to a car company that is the envy of most enthusiasts around the world.
    I mean, how can anyone question their current lineup – they sport two or three of the most beautiful cars ever made, in my opinion.

    For the last couple of decades Aston Martins have relied heavily on their drop-dead gorgeous looks, masking some rather outdated and unreliable technology. And rather ponderous driving dynamics too I’ve heard. That is the unfortunate economics of very low production numbers. I don’t think buyers today tolerate many of those kinds of shortcomings (look at TVR). High-end customers seem to want exactly what Aston Martin is now offering: A stunning design language for their family of cars – bold yet understated; Performance levels that are special to the driver in feel and sound; A world-class, up-to-date chassis design that appears to be extensible in accommodating the range of new models they have in the pipeline; And a gleaming new factory to build them all in. No wonder their order books are bulging with eager customers. I can’t see why they would want to change their business model at all.

    I’ve never bought into this idea of Aston Martin losing the exclusivity angle. Even with these new increased production rates Aston still only makes one tenth the number of units as Porsche. And although Porsches seem to be a common sight, we forget they are still a niche manufacturer when overall auto sales are considered. And spotting an Aston on the road is a truly rare experience – even though I live in one of the wealthier parts of California, I still see one maybe only three times a year – there’s plenty of room for higher production levels. They are so exclusive that most people around here don’t even know what they are!

    I do agree about the condition of their dealerships though. I test drove the Vantage when it first became available several months ago and the dealership was the rattiest I’ve ever seen!

  • avatar

    Its simple supply and demand – is there demand for the car? is there enough supply to meet it? that’s going to determine price, and in the end, profitability

    for example, the v8 vantage has a pretty big supply and not much demand (you’d have to be out of your mind to buy one over a porsche 911 or a z06)

    but if its priced way beyond what the market will bear, they’re not going to sell the cars

    frankly, they need to make cars people WANT
    and I can’t find a reason to want any of their vehicles – there’s something better in every price range, no matter how exclusive the aston seems.

  • avatar

    Then I guess I must be one of those guys who’s out of his mind – I ordered my V8 Vantage today! And I never, for even a second, considered a 911 or a Corvette!

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