Aston Martin Has a Few Problems

aston martin has a few problems

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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  • TheDumbGuy TheDumbGuy on Jul 31, 2019

    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 film.

    • See 2 previous
    • TheDumbGuy TheDumbGuy on Aug 02, 2019

      @ToddAtlasF1 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 !

  • Michael S6 Michael S6 on Aug 02, 2019

    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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  • FreedMike Back in the '70s, the one thing keeping consumers from buying more Datsuns was styling - these guys were bringing over some of the ugliest product imaginable. Remember the F10? As hard as I try to blot that rolling aberration from my memory, it comes back. So the name change to Nissan made sense, and happened right as they started bringing over good-looking product (like the Maxima that will be featured in this series). They made a pretty clean break.
  • Flowerplough Liability - Autonomous vehicles must be programmed to make life-ending decisions, and who wants to risk that? Hit the moose or dive into the steep grassy ditch? Ram the sudden pile up that is occurring mere feet in front of the bumper or scan the oncoming lane and swing left? Ram the rogue machine that suddenly swung into my lane, head on, or hop up onto the sidewalk and maybe bump a pedestrian? With no driver involved, Ford/Volkswagen or GM or whomever will bear full responsibility and, in America, be ambulance-chaser sued into bankruptcy and extinction in well under a decade. Or maybe the yuge corporations will get special, good-faith, immunity laws, nation-wide? Yeah, that's the ticket.
  • FreedMike It's not that consumers wouldn't want this tech in theory - I think they would. Honestly, the idea of a car that can take over the truly tedious driving stuff that drives me bonkers - like sitting in traffic - appeals to me. But there's no way I'd put my property and my life in the hands of tech that's clearly not ready for prime time, and neither would the majority of other drivers. If they want this tech to sell, they need to get it right.
  • TitaniumZ Of course they are starting to "sour" on the idea. That's what happens when cars start to drive better than people. Humanpilots mostly suck and make bad decisions.