AML Share price fall
Discussion
Many posters make it look as if AML has been hit by an unforeseen tsunami. The fact of the matter is, that A Palmer representing some shareholders who were only in it for the money, went out and sold a plan that he now cannot deliver on. Call it recession, overheating etc etc. It comes down to greed. Knowing that sales would be tight, A Palmer continued on a spending spree ( Goodwood, Red Bull Racing etc etc ) completely blowing the cash in the company on all sorts of escapades and now we see the consequences. I feel sorry for the new shareholders and the AML employees and wish AML good fortune. ( Which it desperately needs but it’s recent problems are home made ).
RichB said:
nickv8 said:
... The trouble with the topic of design, everyone’s an expert.
Not sure I get your point? When Ian Callum penned the DB7 it was clear he is an expert. When Zagato built the DB4GT it was clearly the work of an expert and I will say that the resounding success and admiration for the V8Vantage showed that was expertly designed. The fact that the new Vantage has caused such debate indicates a lack of expertise in the design. 
I was at a presentation evening at Grange Hatfield where they had a Bond DB10.
I didn't like it and had fears that the new Vantage would echo the styling and it has albeit slightly better resolved.
An aspect of my working life has been in styling product so I'd like to think I know a winner when I see one.
Added to this is the increase in price points which makes the whole exercise very problematic.
Many supercar car companies produce the odd dud and its forgivable but it's important to quickly recognise the justifiable criticism and react promptly.
All the others Astons in the current range have had very good or pretty good reviews on PH and other forums so is it not reasonable to accept that the new Vantage is not quite right aesthetically.
It's not that bad .......it just ain't quite right.
Re-engineer the Vantage front end to make it an iterative evolution of the old model and much like Porsche and their 911 you will sell a bucketload and continue to do so with each upgrade.
Ironically in doing so you will increase the value of the interim ‘ugly’ Vantage that was only sold for a limited time.
Ironically in doing so you will increase the value of the interim ‘ugly’ Vantage that was only sold for a limited time.
oilit said:
I was told one of those shooting brakes was ordered by someone who ordered it to 'grease the wheels' to get a Valkyrie - and is now being sold as unused by a dealer.
That's a criticism I have of Aston Martin. They need to be selling the "specials" to customers who are genuine enthusiasts, people who actually want the car for the car itself. Not to people who are a) using it as an investment or b) using it as a stepping stone and dont really want the car. If that means making fewer "specials" because the genuine demand is lower then so be it.
If the demand for a car is 100 then make 95 not 105 as they do currently. Residuals hold up better, and that in itself helps create demand. Ferrari and Porsche seem much better at managing this
hornbaek said:
Many posters make it look as if AML has been hit by an unforeseen tsunami. The fact of the matter is, that A Palmer representing some shareholders who were only in it for the money, went out and sold a plan that he now cannot deliver on. Call it recession, overheating etc etc. It comes down to greed. Knowing that sales would be tight, A Palmer continued on a spending spree ( Goodwood, Red Bull Racing etc etc ) completely blowing the cash in the company on all sorts of escapades and now we see the consequences. I feel sorry for the new shareholders and the AML employees and wish AML good fortune. ( Which it desperately needs but it’s recent problems are home made ).
I need to correct you there Mr HB when you say A Palmer represented "some shareholders". A Palmer at that time represented "all shareholders" in other words the owners of the business. And his fiduciary duty was to those shareholders and to get the best price for them. The plan he outlined at that time was, in my humble opinion, deliverable. And institutional shareholders agreed. Again I would urge people to get a sense of proportion here. The plan this year was to sell 7100 cars (at the conservative end of the range). AP is now saying AML might sell 10% fewer cars than they hoped. Not 50% fewer or 25% fewer, 10%. Congratulations if your crystal ball 12 months ago allowed you to see what Trump etc would do this year to that degree of accuracy
AstonV said:
Yes but look how many models Ford, Daimler etc. have, no single model keeps them afloat. Aston has how many, 2 or 3? How can they afford to have their biggest money maker be a huge flop? I want to see them succeed.
Totally agreed. But that's the nature (and risks) of small volume car manufacturing. AML can't afford to get too many things wrong. To give credit to AP he is trying to build up a more diverse range to appeal to different segments (DBX, Mid-Engine, Electric etc). So hopefully it will be less model-exposed when it was essentially just Vantage + DB9 + DBS.Fingers crossed DBX is a success, that could really make/break things here
2002 said:
Genuine question here; but why is that? Why is Europe nearly in recession? Is it a knock on effect from slowing down in China and the US-China tariffs etc.? In other words Trump? I understand the car market slowing down due to diesel, and uncertainty of fuel/climate etc etc.
Is it the 'B' word??
Final post then back to work!Is it the 'B' word??
My economists suggest there's a whole host of factors at work, And of course keep in mind that some European countries are just structurally weak and are always going to be skirting with technical recession (looking at you Italy!).
But Germany is the main problem. Manufacturing and orders there have taken a big tumble and confidence is weak. I was in Munich last week and everyone was warning of signs of unemployment rising. Initially everyone tried to pass it off as just blips from diesel-gate (and then the new standards that came in last year). But there's a more fundamental slowdown at work. The US-China trade war is really beginning to have an impact. Singapore and HK (both essentially ports dealing with the import/export of goods from China to the RoW) have seen major slowdowns. As has Korea (a major exporter of semi-conductors). And inevitably if your a German manufacturing business, exporting around the world and into Asia you've seen demand fall. The slowdown is such that rather than anticipating ECB rate rises in September/October we're now all looking for cuts
The B word clearly isn't helping either. UK corporates have generally curtailed investment and that must be mirrored to some-extent on the continent. No idea how that plays out, but almost certainly not well...
RobDown said:
oilit said:
I was told one of those shooting brakes was ordered by someone who ordered it to 'grease the wheels' to get a Valkyrie - and is now being sold as unused by a dealer.
That's a criticism I have of Aston Martin. They need to be selling the "specials" to customers who are genuine enthusiasts, people who actually want the car for the car itself. Not to people who are a) using it as an investment or b) using it as a stepping stone and dont really want the car. If that means making fewer "specials" because the genuine demand is lower then so be it.
If the demand for a car is 100 then make 95 not 105 as they do currently. Residuals hold up better, and that in itself helps create demand. Ferrari and Porsche seem much better at managing this
jonby said:
As with all manufacturers, they make the right noises, but of all the problems they are dealing with, I'm struggling to imagine that flippers and falling residuals on specials is anywhere close to the ones keeping them up at night. This isn't about whether I agree with you, it's just a reality check
If you have the "right" product at the "right" price it will sell.AM have some decent product but I believe the pricing has become over ambitious, they might have got away with it in a more settled economic environment but that is not the case now.
The circa 20% increase has not only put off some of their core customer base for both new and used cars,as illustrated on this forum, it has and will affect those that could have afforded a used model say 3/5 years old.
That magical £50K price for a decent used model say 3/4 years old is no more.
In order to acheive a churn on used models AM are offering low prices to customers wanting to exchange their car that they purchased new for another new car thus causing further discontent,
The halo projects and ultra expensive projects should be viewed in isolation as the market for them is minuscule and are as much a marketing tool than a reliable source of profit.
avinalarf said:
jonby said:
As with all manufacturers, they make the right noises, but of all the problems they are dealing with, I'm struggling to imagine that flippers and falling residuals on specials is anywhere close to the ones keeping them up at night. This isn't about whether I agree with you, it's just a reality check
If you have the "right" product at the "right" price it will sell.AM have some decent product but I believe the pricing has become over ambitious, they might have got away with it in a more settled economic environment but that is not the case now.
The circa 20% increase has not only put off some of their core customer base for both new and used cars,as illustrated on this forum, it has and will affect those that could have afforded a used model say 3/5 years old.
That magical £50K price for a decent used model say 3/4 years old is no more.
In order to acheive a churn on used models AM are offering low prices to customers wanting to exchange their car that they purchased new for another new car thus causing further discontent,
The halo projects and ultra expensive projects should be viewed in isolation as the market for them is minuscule and are as much a marketing tool than a reliable source of profit.
The fact is that all 4 versions of zag vanquish sold out in the end and that ultimately, will be the only thing AM are really worried about. What happens to their values after they are sold, I would suggest, is of relatively little concern to them. I think it should concern them, but I don't think it does
It will come back to bite them when they start to struggle selling specials and that may be happening already with the latest specials, but that will be too late
A lot of this is just connected to economic and high end car cycles - when they launched V12 Vantage Zag, it was at the worse possible time and sales struggled. Vanq zag was launched at the best possible time. Just. But by the time of delivery, not so good for the buyers. Plus you can't build an entire business on halo cars (valkyrie), rebodies and restomods anyway
AstonV said:
The whole point of tax cuts is to allow people to keep more of "their" own money. Yes that stimulates growth. It's "not" the governments money to begin with. Yes the government spends too much money, but that does not give them the right to take more of their citizens. The government needs to cut their spending, not increase taxes. It's a fact when taxes are reduced, tax revenues to the government go up. Most governments don't concern their selves with revenue, they can always print more money. They are more concerned with control.
Government does not create jobs, government does not create wealth. People create jobs and wealth when allowed to do so.
Agreed, spending cuts can be ideological, but a country with such a massive defect couldn't do that unless it promotes economic growth. The US had a historically high deficit before these cuts were introduced, if you're already facing a shortfall and cut taxes even further then in the long run the only way to pay for them is to promote growth or cut spending. Spending hasn't been cut, it's going up, so they were supposed to be paid for via the economic growth they promote. Again, I'm not stating an opinion here, this is literally what the tax cut was proposed to do. The US Congress Joint Committee on Taxation reported exactly that before it was passed, and even Donald Trump said it would increase jobs and boost industry.Government does not create jobs, government does not create wealth. People create jobs and wealth when allowed to do so.
It's a slight misunderstanding to say governments can "always print more money". There are cases of that happening post-credit crunch, where governments used quantitative easing to buy up government bonds with newly created money. However this was a short term fix to push down the cost of borrowing, governments wouldn't do it cover a structural deficit because it would cause high inflation and devalue the local currency, driving up costs for businesses and stifling growth. It's why the UK stopped their QE program after a few years.
Partly as a result of the tax cuts, coupled with increasing spending elsewhere, the US is borrowing $6800 per year per member of the labour force and spending that in the US economy. The compares with $1200 in the UK, $733 in Canada and $1950 in France. The US federal government is borrowing, and spending, 1.1 Trillion dollars a year on top of tax revenue. That's the cost of the entire Apollo moon program, in today's money, every two and a half months. Surely no economist would argue that kind of spending isn't going to have an economic effect.
I'm really not interested in an ideological discussion. If you're someone who thinks the government shouldn't take in taxes to spend it on public programs then that's fine. All I'm doing is stating the status quo.
Edited by murphyaj on Thursday 25th July 16:03
When AML floated at £19, I thought it was very optimistically priced, so I didn't bother buying shares that I felt were destined to fall. I said to myself that, were the shares to drop to about one third of their initial price, in the 600s, I would buy a few shares. Not as an investment, you understand, but just as a bit of fun to go with my DB7. So today I bought those shares at £6.69 with a little bit of money that I am happy to lose if it all goes wrong.
I don't really understand why the shares have dropped so much in the last two days. It looks like a huge overreaction to a drop in the sales forecast for the next year. I suspect that something else is afoot amongst institutional investors, or that algorithmic trading is cutting in to cap losses.
I don't really understand why the shares have dropped so much in the last two days. It looks like a huge overreaction to a drop in the sales forecast for the next year. I suspect that something else is afoot amongst institutional investors, or that algorithmic trading is cutting in to cap losses.
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