The name Aston Martin practically drips with prestige by many, it is
regarded Britain's answer to Ferrari, luxurious, yet high performing and
possessed of a legendary racing heritage.
Some of its cars are considered icons.
The five released in the 1960s is widely regarded as one of the most
beautiful cars ever produced.
Aston Martins were, while the Aston Martin had a lot of success in racing,
particularly at Lamonts, they the cars were always more what we call grand
touring cars. You know, they could go long distances at high speeds, you
know, in great comfort, as opposed to, you know, being a car that you
necessarily want to take to the track.
It seems fitting that the brand ended up becoming the preferred ride of
that famous British spy.
It has ridden both its mythical fame and real world reputation into the
21st century and has even in recent decades been reinvigorated by
passionate leaders.
But again and again, throughout its long history, Aston Martin has fallen
on some very hard financial times.
When Aston Martin Luganda went public in twenty eighteen shares cost nearly
25 dollars.
In May of 2020, they had fallen to around 50 cents.
CEO Andy Palmer left the company that same month.
Aston Martin released its first ever sport utility vehicle, the X, for the
2021 model year.
In doing so, it is following the lead of luxury carmakers such as Porsche
and Lamborghini. But how much can the BBC's contribute to Aston Martin's
bottom line with the coronavirus and its resulting economic fallout
battering the automotive sector?
It is a tough time for even a legendary name to turn itself around.
Aston Martin was founded in 1913 in London, England, by Lionel Martin, a
race car driver, and Robert Bamford and engineer, Martin won a race called
the Aston Clinton Hill climb in a car, the two built together.
The victory gave the company its name, Aston for the race, Martin for the
driver. The company made its international racing debut in 1922 in the
French Grand Prix.
They then began breaking world records.
Later, Aston Martin won the Biennial Cup at Lehman, France, in 1932.
The industrialist, David Brown bought the company in 1947, leading to a
kind of golden age for Aston Martin.
Key thing is, is to recognize really that David Brown signed the company
without his involvement in nineteen forty seven.
The company would have gone bankrupt again and and it wouldn't have
survived into the modern era.
So it was brown really that I think Brown was probably the first person
that came into Aston Martin and as well as having an enthusiasm and
he was a huge enthusiast for the cars and the racing that came later on,
what, Aston Martin then?
He was also a businessman.
During that time, it began rolling out its famed DB badged cars, grew its
reputation in racing and purchased Luganda, a brand of luxury vehicles.
DBE cars began placing races at Lehman in the early 1950s, but the DEBE
five, which debuted in 1963, was a revolutionary vehicle for Aston Martin.
The DB five became an international icon.
To many, it is perhaps best known as the car James Bond drove in the movie
Goldfinger. It was the most popular film, the biggest blockbuster film
ever at that stage, you know.
So it was a huge deal.
And and so the the Aston Martin DMAE five, because it was such a sort of
integral part of the film.
And what was the character in it suddenly propelled Aston Martin into the
spotlight. Really, for the first time, Aston Martin continued to be a
distinctly British icon over the next three decades.
But it also changed owners several times and repeatedly faced financial
troubles. The company acquired its current full name, Aston Martin
Luganda, in 1975 after it was bought by an international group of
investors hailing from Britain, Canada and the United States.
It was acquired by Ford Motor Company in 1987 as part of a push by the
Detroit automaker into high end brands with legendary names such as Jaguar
and Land Rover. The Blue Oval sold its stake in 2007 as it fell on its own
hard times, and Aston Martin was scooped up by a group of investors,
including a racing executive named David Richards and some Kuwaiti
investment firms. A few more ownership changes took place in the next
several years. In 2012, an Italian private equity firm named Invest
Industrial bought a thirty seven point five percent stake.
And then Daimler took up a small stake in the firm shortly after that
through a range of various investors over the years.
But none, none that really seemed to have the long term commitment and the
resources to to fund what Aston Martin needed in order to transform itself
throughout many of these years from 2000 to 2013.
The company was headed by CEO Ulrick Bez, a German who was regarded as a
transformative leader.
He had been appointed while Ford owned the company and stayed on even as
Aston Martin changed hands.
Bez is credited with overseeing much of the work that led Aston Martin
into a new era that drew comparisons with the David Brown years as an
adviser at Ford, Bear's convinced the automaker to invest in Aston Martin.
The company unveiled the Vanquish at the 2001 Geneva Auto Show.
Underbellies Aston Martin designed a vehicle that did not share any
visible parts with Ford cars, helping to give the impression of a car that
was designed to be unique to the brand from the ground up rather than just
a high end Ford with a legendary nameplate.
The vanquished helped get Aston Martin back into the Bond films appearing
in Die another day in 2002 during his long tenure as chairman and CEO Bez
Grue Aston Martin sales from just a few hundred units a year to thousands.
He also oversaw the successful move of the company's headquarters from
Newport Pagnol to a brand new manufacturing facility engaged in England.
He stepped down in 2013 to take on an ambassadorial role.
Then in 2014, the company hired Andy Palmer, the CEO of Nissan Motor.
Like Bez Palmer had engineering chops, he was trained as one and had
started his career as an apprentice on a car assembly line.
He seemed like a perfect fit for Aston Martin.
Palmer had even grown up around Gaiden England, where the new factory was
located. But Palmer's tenure was marked by troubles.
The company undertook an initial public offering in 2018 at a float price
just above 24 dollars.
Shares subsequently tanked.
This has been a disappointing year for Aston Martin Luganda Road company
chair Penny Hughes in the automaker's 2019 annual report.
Revenue had grown from about 770 nine point five dollars million in 2015 to
a peak of about one point four dollars billion in 2018.
But sales fell to about one point three dollars billion the following
year. After years of growing sales, the company sold 5000 862 units,
a nine percent decline from the 6000 441 it had sold the previous year.
The declines in profit and sales left Aston Martin needing cash.
However, at least some analysts say Palmer inherited a lot of troubles.
First of all, going it alone as a highly specialized, high end automaker
is remarkably difficult.
The struggles that Aston Martins in right now and has been for the last
year or so, you know, a lot of that is based on the decisions that were
made before Palmer's arrival.
And in some in some respects, you know, Palmer's almost as a scapegoat for
the troubles they're having right now.
Most high end brands such as Porsche, Lamborghini, Rolls-Royce and Bentley
are either owned by or supported in some way by much larger automakers.
Aston Martin is something of an exception.
Aston Martin didn't have that advantage of being sold to a big automaker
that could put the money into the brand, and so in order to develop a
range of vehicles, that's very expensive and that that's also been a drain
on Aston Martin's resources.
The second problem for Aston Martin is that while it had many great cars,
it had no sport utility vehicle, purist's bulk at the idea of Porsche, a
Lamborghini or even Bentley and Rolls Royce SUVs.
But these models have become great moneymakers for brands.
Porsche was really the first among these companies to risk controversy by
releasing a sport utility in its case, the first being the Kayan.
Now sales of the Porsche Cayenne and the smaller McCahon outnumber sales
of all other vehicles combined.
For Aston Martin, they are just now launching their first SUV
almost almost two decades after Porsche launched the Kayan, even
Lamborghini has an SUV now.
So that I think that has that hurt Aston Martin over the last several
years. The vehicles they had, while they're excellent vehicles, they just
haven't they're not the vehicles that most consumers seem to want to
drive right now.
Aston Martin is, of course, faced with the added challenge of having to
right its ship amid the coronavirus pandemic, which has dealt a blow to
the entire auto industry in 2020, the Canadian fashion mogul Laurence
Strohl led an investor group that took a significant stake in the carmaker
when it delivered results for the first half of 2020.
The company said more than 90 percent of its global dealership network was
open, though it did expect the pandemic to suppress demand for sports
cars. It also expected its production facility in Gordon, England, to
resume business at the end of August, which is later than it had planned
in the first half of 2020.
It shuffled its executive team, appointing a new CEO and a new CFO.
Aston Martin has begun to deliver the SUV, which management says is
critical to a successful future.
Industry watchers say the company is, of course, behind nearly everyone
else, but they need to get something going on the electrification side in
order to maintain be able to stay in the marketplace in Europe in
particular, where they, you know, the European regulations on CO2
emissions are getting substantially stricter this year.
One of the challenges for a small automaker is if they don't have some
more efficient, more fuel efficient vehicles to offer, you know, to offset
the the high fuel consumption of cars like the ones that Aston Martin
sells today, it's you know, they have to they're they're facing some
pretty significant fines.
And Aston Martin appears to be cozying up to Mercedes.
The newly appointed CEO, Tobias Mor's previously ran Mercedes AMG, the
German automaker's in-house performance tuning shop.
Like Aston Martin, Mercedes also has a very strong presence in racing.
It has been winning Formula One races in recent years to the chagrin of
longtime leader Ferrari.
Mercedes is also first and foremost a luxury brand, and it has some very
high end models that rival Aston Martins in price and features.
Some auto industry analysts expect Aston Martin to strengthen its ties
with Mercedes Benz in the future, since going it alone can be so
difficult. It's a global auto market.
As competitive as this one is, you've got constant evolution and constant
progress in technology, and it takes money to keep up.
And Aston Martin is undeniably struggling.
People who evaluate the cars I've seen them, you know, kind of have great
they've always had great looking cars.
They've always offered plenty of performance.
But things like user interfaces inside and technology safety, technology
and connected car technology, things that everyone expects in a modern car
they've struggled with. If you're going to borrow from another company to
get some of your electronics and even some of your drivetrain components,
Mercedes Benz is a good source.
The company plans to reestablish itself in the prestigious global Formula
One racing series in 2021.
Strohl owns the Racing Point F1 team, which Aston Martin will take over.
The automaker has sponsored the Red Bull F1 racing team in the past, but
2021 will mark its full return as a manufacturer after an absence of about
60 years.
That racing credibility is vital for the reputation of a company trying to
sell high end cars.
Aston Martin declined to comment to CNBC on its present situation or its
plans. Technology is changing the auto market at an incredibly rapid pace.
Pricey cars are profitable for makers, but competition is stiff, and Aston
Martin cannot rest on its illustrious history and pedigree.
It needs to keep showing buyers that it is living up to its storied name.