Aston Martin: A Story of Iconic Luxury, Trials & Tribulations, as well as Revival
Since being founded in 1912, Aston Martin has had a legacy of "bespoke, high-performance luxury and racing cars," in the words of former CEO Andy Palmer, "Owning an Aston Martin is about expressing one's personality and appreciation for power and refinement."
With ownership changes over the years (such as Ford, through the PAG group) and more recently, a consortium of Middle-Eastern Investors, Aston Martin has suffered time and time again from a lack of earnings and organizational structure. With the further scarcity of new products, Mark Wilson (former CFO) was quoted as saying, "Show me another car company that hasn't fundamentally done a new product in a decade, and I'll show you a dead car company."
At market close on May 31st, 2019, Aston Martin Lagonda's stock price was $228.20 a share. Just two years later, its price is about 1/10th of what it was then, coming in at $29.97/share. Needless to say, something needs to be done.
According to CEO Tobias Moers, Aston Martin has made many grand plans over the past years, but they did not have a truly cohesive plan when he joined the team. Moers hopes to leverage his past relationship as the head of AMG (of Mercedes) and the 20% stake that Mercedes has in the brand to their advantage.
This partnership with Mercedes, combined with solid capital from Lawrence Stroll (Chairman of the Board) and cash from Mercedes, means the brand is in good shape from a cash perspective. Add in a strong engineering and design team and the strong sales front the DBX has set the brand up for; it is not unlikely that the brand could see future success over the next 2-3 years.
The DBX, in his opinion (Moer's), is the model with the most potential as the brand would likely not survive without it. In the future, the plug-in hybrid tech developed by AMG will be fitted into the car and other variants for different market segments. Moers noted that their front-engine sports cars will still be present, with upgrades such as better connected tech and improvements on the driving experience such as through handling.
Regarding special projects such as the Valkyrie and the Valhalla, there will be a change in some features, and their release dates have been shifted. Moers is bullish on mid-engines but notes that they need to be electrified to compete in zero-emissions zones, especially in Europe.
Long term, Aston Martin will begin transitioning to electric vehicles mid-decade, and the company plans for half of its cars to be fully electric by 2030, and the rest electrified.
The brand's plans to compete in the World Endurance Championship's new Hypercar class with the Valkyrie were scrapped for cost concerns. However, their involvement in F1 will continue well into the future. This involvement is due to Lawrence Stroll, Executive Chairman of Aston Martin. Before Stroll, a Canadian billionaire and owner of a Formula 1 team, came in, Aston was in an incredibly tough position. Ultimately, the new Vantage was a sales flop, and a 2018 IPO was unsuccessful. Following the move, Andy Palmer, CEO of Aston Martin, had left the company and was replaced by Moers.
Before the move, Aston had an agreement with Mercedes to access technology (that was a few years old), and they had restrictions on tuning as the motors were supplied. Now, they have access to the latest tech and the ability to make changes to the engine.
This year, Stroll had doubts about his team's competitiveness during the 2021 season due to the change in aero regulations which cost them close to a second. His focus, now, is on next year's car.
In their final year as Racing Point (before becoming Aston Martin Cognizant Formula 1), Sergio Perez won the Sakhir Grand Prix. He finished fourth in the Constructors' World Championship – an raw third finish, but a 15-point deduction was upheld for a breach of rules.
However, this season, they have fallen behind from what is shaping up to be a battle for P3 between McLaren and Ferrari, with some limited spurts of recovery, such as the Monaco Grand Prix where both cars finished in the points (Vettel in 5th, and Lance Stroll in 8th).
In the words of Lawrence Stroll, "So we are trying to claw our way back and never give up, and we keep bringing bits to the car to try and get back to where we should be. I don't think we can get back to last year's performance because then we'd have to give up focus obviously on the 2022 car. It's a fine balance. But we will fight right to the end."
What could be perceived as a disappointing return to F1 for Aston Martin as a constructor for the first time in 60 years, Stroll is anything but underwhelmed. In his words, "I don't think it took away from the rebranding and excitement. That's been phenomenal. We see it through fan engagement."
Fast forward a few weeks, "Sebastian Vettel looks like a man reborn at Aston Martin, and the decision to sign him appears to be paying off." Coming second to Perez in Sunday's Azerbaijan Grand Prix, he handed Aston Martin its first podium as a Formula One constructor. "Seb has found himself in a much more comfortable place, with the right sort of pressure and with engineers who he is learning to work with. He's getting results, and he deserves it. Bravo." said Ross Brawn, Formula One's managing director for motorsport.
Aston's troubles have been well-documented, but this newfound comradery and push for success at the racing level may yield much-needed momentum to extend to the consumer side of the brand.
While it is undeniable that there are many moving parts, many people believe the company is still a "total leap of faith" in terms of investment quality; it is hard to argue that these parts are not moving in the right direction.
Written by Jack Argiro & Edited by Jay Devon