Aston Martin gets a boost from Formula 1, new models

Aston Martin gets a boost from Formula 1, new models

Sports car maker Aston Martin expects to be cash-flow positive this year with a parade of new models and marketing tailwinds from Formula 1, according to CEO Lawrence Stroll.

“We are now at a real transitional moment, a turning point for this company,” Stroll told CNBC. “We are finally introducing all of our products after designing and building them for the last four years after I took over the company. Going forward, we will now have normal quarterly production, not those hockey sticks we’ve seen in the past, but the more traditional quarterly stream of new vehicles constantly coming to market.

Stroll said the company, which has been losing money for years, expects to be cash flow positive starting in the third quarter and continue to do so in the fourth quarter and beyond.

That would be a dramatic turnaround for the storied British automaker, known both for its role in the James Bond films and for its history full of financial ups and downs. Stroll, a billionaire former fashion mogul who stepped in as Aston Martin’s chief executive in 2020, pushed through a sweeping plan to restore the brand’s luster and profits.

Aston Martin has overhauled and improved manufacturing, strengthened its finances to invest in the future and is now launching a fleet of new products that feature high-performance and luxury finishes.

Aston Martin F1 Team owner Lawrence Stroll (R) shakes hands with Ferrari team principal Frederic Vasseur on the starting grid before the F1 Grand Prix of Miami at the Miami International Autodrome on May 5, 2024 in Miami, Florida.

Chris Graythen | Getty Images

Still, production fell and pretax losses doubled in the first quarter compared to a year earlier, sending the company’s shares to their lowest level since 2022. Stroll said the production decline and an expected decline in the second quarter were part of a deliberate plan to phase out older models and make room for the introduction of new models in the coming months.

“We made a conscious decision to stop all production of certain models,” he said. “We have reduced wholesale production volumes to prevent older cars from accumulating in dealer networks during the launch of all our brands.” new vehicles.

The new vehicles include the new Vantage, a front-engine, rear-wheel-drive sports car with 656 horsepower and a starting price of $191,000.

The automaker also introduced the new DBX707, its high-performance SUV that accelerates from 0 to 60 mph in 3.1 seconds and has a top speed of 200 mph. The company has also introduced an open version of its DB12, the DB12 Volante.

Aston Martin has unveiled a new super-powered V12 engine that is expected to be called Vanquish later this year.

The company is also expected to begin deliveries of its $800,000 hybrid supercar called Valhalla late this year or early 2025.

The $800,000 Aston Martin Hybrid Valhalla.

Courtesy: Aston Martin

In addition to new models, Aston Martin is continuing to grow its personalization program. A year after opening its Q New York showroom, which allows customers to customize their cars with their own paint colors, interior fabrics, stitching and other details, the company is planning Q locations in London, Miami and California.

Stroll said some customers are paying an additional $100,000 to $200,000 above the sticker price of their cars for highly specialized personalization. One customer even requested fur in the interior, he said.

The customization program has helped increase the average selling price of an Aston Martin by 35% to $294,000 over the past two years.

“It was really, really a home run,” Stroll said. “Not just from a financial perspective. People are coming in.” [to Q New York] and they understand what Aston Martin is all about. They say, “OK, I understand.” You know, it’s the show, it’s the feeling.

Aston Martin is also attracting a younger buyer, largely thanks to the Formula 1 team that Stroll owns. Stroll said the average age of an Aston Martin customer is now 42, up from 55 four years ago.

“The brand is really on fire and a lot of that has to do with Formula 1,” he said. “Participation in Formula 1 over the last three years has really rejuvenated the brand and our entire new product portfolio.”

Stroll dismissed reports that he wanted to sell a minority stake in Formula One team Aston Martin to help finance the car maker.

“We have absolutely no need to raise capital,” he said. “When you start building 8,000, 9,000 vehicles [a year], we achieve extremely positive cash flow. …So no, there is no interest or need to collect more.

On the company’s electric vehicle future, Stroll said the company is postponing the launch of an all-electric Aston Martin from 2025 to 2026. The company has developed four electric vehicles based on the same platform, but Aston Martin customers do not show enough demand.

“We don’t want to swim upstream,” he said. “Our consumer, at least Aston Martin’s customer, the high-performance customer, is telling us that we are not ready for an electric vehicle, at least not by us. So we hear that loud and clear.”

Aston Martin gets a boost from Formula 1, new models

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2024-05-31 18:13:16