By on July 31, 2019


Keen to expand into new segments and redefine itself as an auto brand, Aston Marin is now a publicly traded company with a crossover vehicle on the horizon. The plan, established by CEO Andy Palmer and about as novel as dirt, was due for a checkup last week. Sadly, the automaker was not released with a clean bill of health. Aston reported a pre-tax loss of £78.8 million ($92 million) in the six months ending in June.

Speaking with the media, Palmer argued that the company had done well in the first quarter but claimed economic conditions and dwindling dealer interest had hurt the business in Europe, the Middle East and Africa. The United States performed comparatively better — possibly due to the marque bringing on Tom Brady as a brand ambassador, even though at least two of the cars built with the athlete’s name on them have already passed through the secondhand market $100,000 below sticker. Unfortunately, minor victories weren’t nearly enough to keep the firm’s share price from tumbling downward like an allegedly deflated football.

According to Reuters, Aston Martin Lagonda shares have fallen by around three quarters from their 19-pound float price to just below 5 pounds. “We are disappointed that our projections for wholesales have fallen short or our original targets, impacted by weakness in two of our key markets as well as continued macro-economic uncertainty,” Palmer said, skirting the stock issue.

It would be unfair to claim Aston’s problems as unique, though. It’s suffering from the same economic downturn that’s hampering mainstream automakers. It’s trying to expand by building an SUV factory in Wales and dabbling with electrification, which isn’t cheap. But its smaller scale places it in a more precarious position than most volume manufacturers. Aston Martin is lucky to sell more than 2,500 ultra-expensive cars in Europe each year, making every delivery count all the more. By that metric alone, the automaker is doing decently. Retail sales were up roughly 26 percent in the first half of the year before things soured.

However, the company is having trouble coping with Brexit and its numerous investments into what it hopes will be a thriving future. In the short term, it says it wants to keep its vehicles in demand and has reduced its global sales forecast from over 7,000 units to roughly 6,500 as dealers get skittish. While this makes sense for a high-end nameplate, Aston being publicly traded complicates things. Any chink in the amor can send investors heading for the hills and, when you’re a low-volume, ultra-premium British brand, problems are bound to arise.

Palmer has done a pretty good job with Aston Martin thus far, but the growth being promised has yet to manifest. The business may have gone public a little prematurely, but don’t presume the latest financial losses are a death sentence for the brand. This will likely come down to how the business navigates the UK’s leaving Europe and the success of its new products, especially the all-wheel drive DBX crossover. The model is slated to go on sale early next year.

 

[Image: Sibuet Benjamin/Shutterstock]

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17 Comments on “Aston Martin Has a Few Problems...”


  • avatar
    ToddAtlasF1

    How come their road cars have Mercedes-Benz engines while they sponsor a Honda-powered Formula 1 team? They’re in the process of releasing a road car designed by Adrian Newey. It will be a chariot of the gods by the god of car design.

    • 0 avatar
      Lockstops

      I’m pretty sure only the Vantage and DB11 V8 model has a Mercedes engine. The DB11/DBS V12 DBS engine is their own design. Valkyrie is Cosworth.

      Aston does get much of the electronics from Merc, their horrible to use but pretty feature-rich (if Aston has all the connectivity etc. features) previous generation COMAND infotainment system is used in Vantage and DB11/DBS at least.

      We’ll see what engines the upcoming SUV and future models will have.

      Their upcoming new Lagonda brand will apparently be all-electric so that’s a wasted opportunity to combine the fortuitous similarity of the names Lagonda and Honda…

  • avatar
    dukeisduke

    How about autonomous vehicles? Instead of James Bond’s car, it could be a rolling version of M’s office. Or a club, complete with a port dispenser, and a humidor.

  • avatar
    sportyaccordy

    Too. Many. Brands.

    Too. Many. Vehicles.

    Plus old Aston Martins are way way way way way cooler than the new ones. $150K for a new Vantage V8… or stickshift V12 of your choosing? Hmm

  • avatar
    ajla

    “It would be unfair to claim Aston’s problems as unique, though. It’s suffering from the same economic downturn that’s hampering mainstream automakers.”

    Compare AM’s current financials to Ferrari’s.

    Some auto companies are struggling right now, but the ones originating in the UK are uniquely garbage financially speaking.

    • 0 avatar
      Lockstops

      Ferrari at least is making many original models of their own, and makes money in many areas. They’re getting serious income from a wide range of cars.

      Aston’s problem is that in its lowest price model demand is not that strong to begin with, and then it’s basically just a slower, less bassy sounding Mercedes-AMG GT with older infotainment tech. As many have said: if you want to buy a Mercedes-AMG GT then buy the Merc, not the Aston (even though the Aston is one of the most beautiful cars in the world).

      In their higher price model the DB11/DBS they don’t have enough variation and they’ve also cheapened it by offering a lowlier V8 engine option. They don’t have enough rich clientele hooked onto their ‘exclusive lifestyle brown-nosing experience’ for how much they have to spend on it.

      Aston customers lose massive amounts of money on depreciation because their cars aren’t technically special at all (compared to the rest of the market, I’m not saying they’re bad cars), it’s all about the brand image.

      Their SUV will give them a sure footing, no doubt, it’s just a matter of waiting for it to be filling their coffers again. Rape any brand for a cash cow and you’ll make a lot of money for at least a while, until you’ve cheapened the brand enough to need a new ‘exclusive’ brand or sub-brand to add an SUV to…

  • avatar
    Vanillasludge

    Design a crossover and sadly, have it contract built in the EU to buffer the effects of Brexit.

    • 0 avatar
      Lockstops

      Just goes to show what BS it is when EU ‘priests’ claim to be un-xenophobic saints of openness and free trade. In reality they are belligerent mafiosos and have massive trade barriers.

      • 0 avatar
        MBella

        Absolutely. Getting a free trade agreement with Britain should be the first priority for EU leaders. Instead it’s open borders everywhere else. Not trying to keep free trade with GB will be absolutely moronic. Since moronic is exactly the way EU bureaucrats like their policies, that might actually happen.

        • 0 avatar
          ToddAtlasF1

          It’s almost like EU leadership’s priorities don’t lie with free trade, or free choices of any other kind.

          • 0 avatar
            Lockstops

            Maybe France, Belgium, Germany etc. just have a built-in need to stir s**t up until there’s a world war and they (even the elite) lose everything.

  • avatar
    Lockstops

    If only Aston Martin had such innovative ideas as streaming Youtube in their cars then they’d be on top…

  • avatar
    JoeBrick

    IMHO, Aston Martin has an established reputation as the maker of seriously sporting cars, like the one that everybody knows, the DB-5, and its modern equivalents. They play in a niche market, and should stay where they are. Small automakers should not try to be everything to everyone. My advice to them is the same advice that I would give to ALL small automakers- stick to what you are good at. Make the kinds of cars that your customers want and expect. And since the market has spoken about its absolute love for CUVs, make one of those too. BUT- make it conform to the type and style of your CORE ESSENTIAL product. If your thing is total luxury, make sure that your CUV exudes total luxury. If your thing is speed with class and elegance, make sure your CUV says speed, class, and elegance. If your core customers expect utility and practicality, make that the first thing that people see when looking at your new offering.
    “I have lots of ideas. I just ain’t in charge.”- Gallagher
    Maybe Tom Brady should have a part in the new James Bomb…er…Bond film.

    • 0 avatar
      whynot

      There is no money in that though. Which is why small independent automakers sticking to niche markets are constantly broke, with their vehicles constantly having compromises (eg it’s beautiful and sounds nice…but the build quality is terrible and all the tech is outdated), and are frequently bouncing around from new owner/partner to new owner/partner.

      Sticking to what you are good at for them is usually a recipe for going bankrupt…hence why they are trying to branch out.

    • 0 avatar
      ToddAtlasF1

      I hear the new James Bond is going to drive a Subaru Forrester with a dog bed in the back seat. Maybe that’s why Aston-Martin is thinking about offering a CUV.

      • 0 avatar
        JoeBrick

        The new James Bomb…excuse me Bond film seems to be going all-out to attract the modern diversity-is-our-strength crowd. Moneypenny is a black chick- OK I can see that- Felix Leiter is also black. OK, that’s all right as well. But the replacement 007 is a black WOMAN ! Hold everything ! Stop the presses ! That is just too much for an old Ian Fleming fan.I PROTEST !

  • avatar
    Michael S6

    It is very hard to be a niche car maker with a volume of 7000 cars and make money. You usually have to be part of a bigger company to survive and be profitable. As far as Subaru goes, they are going to bypass autonomous driving by having dog chauffeured cars.

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