Vantage Deal, New Owners, All Positive!
Discussion
hornbaek said:
AML has not “sold” these discounted cars before the end of the 24 months period. They have merely rented them out as they bear the risk of the residual payment. Consequently the “ownership” does not change until the moment when the rental deal ends and the rental contract holder either pays the residual and takes ownership or dumps the car. This all looks like a desperate move from a so-called premium brand.
Happy New Year Hornbaek!Edited by hornbaek on Tuesday 31st December 14:50
kent_phil said:
Has this offer now passed? Or is it a stock only.
Saw this thread, it got the man-maths rolling and it certainly does look a good deal - did enjoy my old V12V ownership days.
The offer on the main Aston site doesn't look nearly as competitive.
Cheers,
Phil
The two brokers we saw deal was Contract Cars and Amber Vehicle Solutions. Went Amber because firstly the representative was so switched on with with specs and helped us choose what suited us plus they didn’t ask for £500 arrangement fee that Contract Card asked . Saw this thread, it got the man-maths rolling and it certainly does look a good deal - did enjoy my old V12V ownership days.
The offer on the main Aston site doesn't look nearly as competitive.
Cheers,
Phil
Both said need to be December registered do I would doubt any further left but go on contract cars and leasing site which reviews most broker deals .
Good lunch and Happy New Year to all
hornbaek said:
AML has not “sold” these discounted cars before the end of the 24 months period. They have merely rented them out as they bear the risk of the residual payment. Consequently the “ownership” does not change until the moment when the rental deal ends and the rental contract holder either pays the residual and takes ownership or dumps the car. This all looks like a desperate move from a so-called premium brand.
It must presumably be more complicated for Vantage stock which was already at dealers, because the dealers are required to make prompt payment to AML for cars. They would therefore already be owned by the dealer.
In the past, Aston Martin have said they only build cars to order, either specified by end customers, or by their dealers.
Have AML been building additional Vantage cars, which have not been ordered ?
As you say Jon, AMLs business model is to sell the cars to the dealers (who with the exception of Works are independent).
Therefore and, contrary to our ever pessimistic friend, it’s not AML who are likely to be taking the residual risk here but whichever finance company is backing the scheme. However as we’ve discussed on this forum in several places AML are likely to be offering some incentive to the dealers (it remains to be seen in what form). The dealers I guess also benefit as well, stock shifted, more customers (more service clients).
The cars were intended to be registered by end December (it’s not obvious why, other than to set a deadline, it won’t have a huge impact on AML figures as they’re impacted by wholesale not retail numbers). I won’t be too surprised to see dealers doing similar offers over the next week or two to clear the remaining 1-2 cars that most dealers have (eg Bristol had a last minute cancellation on a Morning Frost white car).
Jon - I’m not sure where you got your comment about aml only making cars to order (dealer bs?)? I don’t think that’s been true for years. Almost all the US cars are done to dealer order and we all know the dealers order their own cars in addition to customer orders. (Plus inevitably they get cancelled orders)
Therefore and, contrary to our ever pessimistic friend, it’s not AML who are likely to be taking the residual risk here but whichever finance company is backing the scheme. However as we’ve discussed on this forum in several places AML are likely to be offering some incentive to the dealers (it remains to be seen in what form). The dealers I guess also benefit as well, stock shifted, more customers (more service clients).
The cars were intended to be registered by end December (it’s not obvious why, other than to set a deadline, it won’t have a huge impact on AML figures as they’re impacted by wholesale not retail numbers). I won’t be too surprised to see dealers doing similar offers over the next week or two to clear the remaining 1-2 cars that most dealers have (eg Bristol had a last minute cancellation on a Morning Frost white car).
Jon - I’m not sure where you got your comment about aml only making cars to order (dealer bs?)? I don’t think that’s been true for years. Almost all the US cars are done to dealer order and we all know the dealers order their own cars in addition to customer orders. (Plus inevitably they get cancelled orders)
Jon39 said:
Ex Boy Racer said:
cayman-black said:
These deals have been great but now this Vantage is a £100-110k car who would pay more?
Surely a car is worth what the market will pay rather than what the manufacturer would like. So, these cars didn't sell at £140K but sell well at £100K - ergo, they are a £100K car, period.Fair play to AM for accepting that fact and moving accordingly, but there is a concern that the buyers are only doing so because they think they are getting a great deal. If it was set at £100K originally, would they be jumping at this deal quite so ardently I wonder?
Please excuse my generalisation, but has the big attraction for new customers, not been the '£100k price', but the 'only £1,000 per month'.
After 2 years, they will probably move on to another bargain monthly offer.
The plan has certainly worked well for AML's Q4 figures, but I suspect the new customers may not be like buyers of the past 15 years, many of whom became loyal repeat Aston Martin customers, several times over. Do you remember my bought more than once topic? The repeat buyer numbers were surprising.
Edited by Jon39 on Tuesday 31st December 12:10
An Aston Martin should not be the same price as a Porsche 911. The new Vantage is more money (sticker) than the previous V8 Vantage, but it should be able to bring at least the price point that the previous generation car did (yes, they were discounted, but not to this extent and certainly not at this point in its lifespan). These are supposed to be low production, hand-built, very premium cars, and they need to look and feel like it -- so the buyers perceive them as worth the money. If they can't sell unless the price is this low, AM has some serious work to do.
SagMan said:
The two brokers we saw deal was Contract Cars and Amber Vehicle Solutions. Went Amber because firstly the representative was so switched on with with specs and helped us choose what suited us plus they didn’t ask for £500 arrangement fee that Contract Card asked .
Both said need to be December registered do I would doubt any further left but go on contract cars and leasing site which reviews most broker deals .
Good lunch and Happy New Year to all
Thanks to all for the pointers, will make some calls - does feel like a slippy slope...Both said need to be December registered do I would doubt any further left but go on contract cars and leasing site which reviews most broker deals .
Good lunch and Happy New Year to all
Happy new year,
Phil
Speedraser said:
Jon39 said:
Ex Boy Racer said:
cayman-black said:
These deals have been great but now this Vantage is a £100-110k car who would pay more?
Surely a car is worth what the market will pay rather than what the manufacturer would like. So, these cars didn't sell at £140K but sell well at £100K - ergo, they are a £100K car, period.Fair play to AM for accepting that fact and moving accordingly, but there is a concern that the buyers are only doing so because they think they are getting a great deal. If it was set at £100K originally, would they be jumping at this deal quite so ardently I wonder?
Please excuse my generalisation, but has the big attraction for new customers, not been the '£100k price', but the 'only £1,000 per month'.
After 2 years, they will probably move on to another bargain monthly offer.
The plan has certainly worked well for AML's Q4 figures, but I suspect the new customers may not be like buyers of the past 15 years, many of whom became loyal repeat Aston Martin customers, several times over. Do you remember my bought more than once topic? The repeat buyer numbers were surprising.
Edited by Jon39 on Tuesday 31st December 12:10
An Aston Martin should not be the same price as a Porsche 911. The new Vantage is more money (sticker) than the previous V8 Vantage, but it should be able to bring at least the price point that the previous generation car did (yes, they were discounted, but not to this extent and certainly not at this point in its lifespan). These are supposed to be low production, hand-built, very premium cars, and they need to look and feel like it -- so the buyers perceive them as worth the money. If they can't sell unless the price is this low, AM has some serious work to do.
We talked about how AML had propped up their “sold” vehicles by stuffing the dealerships. With the rental deal they have obviously cleared the overhang (having been forced to agree a deal with the dealerships as of who takes the hit) - but at what costs to the overall brand value is my question ?. Very few premium brands have come back from discounting their merchandise so heavily.
RobDown said:
Jon - I’m not sure where you got your comment about aml only making cars to order (dealer bs?)? I don’t think that’s been true for years. Almost all the US cars are done to dealer order and we all know the dealers order their own cars in addition to customer orders. (Plus inevitably they get cancelled orders)
Simply a remark to further discussion Rob.
I did refer to dealer specified cars though, '... only build cars to order, either specified by end customers, or by their dealers.
Yes I did know about the USA practice. Possibly seems strange to us because here, most buyers are very particular and personal about the specification.
My line of thought was, if there is a build up of unsold stock at the main dealers, those dealers would then reduce further orders. However, Gaydon would want to keep production going, so if they continue to build, do they then perhaps specify those cars themselves?
We run a commercial vehicle finance brokerage so have a good understanding of how most manufacturers work.
We don’t do much with the higher end brands such as Aston Martin as our clients tend to sort these vehicles themselves as they enjoy the experience.
One thing that is apparent is the global slowdown in new car sales, across the board manufacturers have surplus of new cars for individual markets however as we know it’s not as easy as stopping production or sending cars elsewhere.
I expect Aston Martin have planned to reduce build of RHD models for 2020 but also wanted to clear the decks of existing dealer stock. There are also further EU emissions changes starting today that will fine manufacturers who go over a set average CO2 (I should really read the pack I was sent to understand the impact) which no doubt was related to registration date hence so many manufacturers pushing their high omitting cars for December registration (BMW X4M, Volvo T5’s etc)
As for who takes the loss, Aston Martin use Alphera who are owned by BMW Finance for funding of the cars. I would expect Alphera will be the ones taking to loss as they would have set the GFV based on list price, CAP Monitor estimates etc but this goes out the window when someone drops £40k off the front end and in theory devalues the whole market.
Either way it is great for the guys that took advantage as well as us that will be buying nearly new in the future. Even if Aston Martin halt production and bring in artificial waiting times like Porsche and Ferrari I think the damage is done.
We don’t do much with the higher end brands such as Aston Martin as our clients tend to sort these vehicles themselves as they enjoy the experience.
One thing that is apparent is the global slowdown in new car sales, across the board manufacturers have surplus of new cars for individual markets however as we know it’s not as easy as stopping production or sending cars elsewhere.
I expect Aston Martin have planned to reduce build of RHD models for 2020 but also wanted to clear the decks of existing dealer stock. There are also further EU emissions changes starting today that will fine manufacturers who go over a set average CO2 (I should really read the pack I was sent to understand the impact) which no doubt was related to registration date hence so many manufacturers pushing their high omitting cars for December registration (BMW X4M, Volvo T5’s etc)
As for who takes the loss, Aston Martin use Alphera who are owned by BMW Finance for funding of the cars. I would expect Alphera will be the ones taking to loss as they would have set the GFV based on list price, CAP Monitor estimates etc but this goes out the window when someone drops £40k off the front end and in theory devalues the whole market.
Either way it is great for the guys that took advantage as well as us that will be buying nearly new in the future. Even if Aston Martin halt production and bring in artificial waiting times like Porsche and Ferrari I think the damage is done.
Auto810graphy said:
...... There are also further EU emissions changes starting today that will fine manufacturers who go over a set average CO2 (I should really read the pack I was sent to understand the impact) which no doubt was related to registration date hence so many manufacturers pushing their high omitting cars for December registration (BMW X4M, Volvo T5’s etc)
Thank you for your comments.
Referring to your EU emmisions point, can perhaps AML benefit from any type of low volume rule ?
What happens when not having any small engines in their range ?
Jon39 said:
Thank you for your comments.
Referring to your EU emmissions point, can perhaps AML benefit from any type of low volume rule ?
What happens when not having any small engines in their range ?
REGULATION 2019 631 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL setting CO2 emission performance standards
Any manufacturer of fewer than 10.000 cars can be granted five additional years to meet the standards - (I believe the number of new car registrations in the EU matters here).
The EU fleet wide target is 95 g CO₂/km plus some allowance for vehicle mass exceeding 1.380 kg. Additional allowance is 1 g CO₂/km for each additional 30 kg vehicle mass; therefore a car with 1.680 kg = Vantage gets a limit of 105 g CO₂/km due to its additional weight of 300 kg.
The New Vantage emits 230 g CO₂/km, the V12VS 387 g, the DBS 285 g CO₂/km.
The penalty is about 95 € per excess g CO₂/km per car. Therefore each new EU registered Vantage will incur a penalty of (95 € x (105 - 230) g CO₂/km) = 11.875 €; please compare to leasing cost...
But there is more to come: from 2025 on the limits are reduced by another 15%, and from 2030 on by 37.5%, down to 59 g CO₂-/km for new cars.
Nbgring said:
Jon39 said:
Thank you for your comments.
Referring to your EU emmissions point, can perhaps AML benefit from any type of low volume rule ?
What happens when not having any small engines in their range ?
REGULATION 2019 631 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL setting CO2 emission performance standards
Any manufacturer of fewer than 10.000 cars can be granted five additional years to meet the standards - (I believe the number of new car registrations in the EU matters here).
The EU fleet wide target is 95 g CO?/km plus some allowance for vehicle mass exceeding 1.380 kg. Additional allowance is 1 g CO?/km for each additional 30 kg vehicle mass; therefore a car with 1.680 kg = Vantage gets a limit of 105 g CO?/km due to its additional weight of 300 kg.
The New Vantage emits 230 g CO?/km, the V12VS 387 g, the DBS 285 g CO?/km.
The penalty is about 95 € per excess g CO?/km per car. Therefore each new EU registered Vantage will incur a penalty of (95 € x (105 - 230) g CO?/km) = 11.875 €; please compare to leasing cost...
But there is more to come: from 2025 on the limits are reduced by another 15%, and from 2030 on by 37.5%, down to 59 g CO?-/km for new cars.
Thank you.
Your explanation is very good. When I thought of this aspect, I did look at the actual EU directive wording. Had a job to stay awake.
A question.
AML have a stated target of 7,000 sports cars from Gaydon, plus 7,000 vehicles from St Athan.
That would put them well over the 10,000 low volume figure which you mention.
Will that create a problem for AML ?
If a manufacturer is based outside the EU, will these rules only apply to the number of vehicles exported to EU countries ?
Perhaps then AML will not have a problem with the 10,000 figure.
Edited by Jon39 on Thursday 2nd January 18:14
As you mentioned - that is tough reading and I don´t want to spend that time on this topic.
Your logic is close to what is my reasoning: The EU would want to guide or to punish only what is within their directive - and that is vehicles registered in EU countries. Aston Martin will not exceed a 10.000 number of EU registrations.
But I am not sure at all and this is only guesswork...
Anyway, in five years the rules will fully apply to AML.
On the other hand, would another £ 10.000 per car kill AML?
It will be a somewhat increasingly exclusive hobby to own a gasoline based sports car.
Your logic is close to what is my reasoning: The EU would want to guide or to punish only what is within their directive - and that is vehicles registered in EU countries. Aston Martin will not exceed a 10.000 number of EU registrations.
But I am not sure at all and this is only guesswork...
Anyway, in five years the rules will fully apply to AML.
On the other hand, would another £ 10.000 per car kill AML?
It will be a somewhat increasingly exclusive hobby to own a gasoline based sports car.
Must be a volume target issue Page 102 (September 2018 AMLGH plc doc):
Limited supply to protect brand exclusivity and pricing power:
HLS (High Luxury Sports) car manufacturers typically employ a low volume production strategy, where the volume does not
typically vary based on demand but is rather based on volume targets established to maintain a reputation
of exclusivity and scarcity among purchasers of their cars. Manufacturers deliberately monitor and maintain
their product volumes and delivery wait-times to promote their reputation, while being sensitive to local
client expectations in particular markets. In addition, manufacturers within this segment enhance the
uniqueness of particular models by bespoke customisations, variants and derivatives to meet the demands
of their customers.
The low volume strategy, combined with the quality and performance of the cars produced, has typically
allowed HLS car manufacturers to charge high average selling prices, which, through continual
improvement in performance, technology, quality and other features, have trended up over time.
Limited supply to protect brand exclusivity and pricing power:
HLS (High Luxury Sports) car manufacturers typically employ a low volume production strategy, where the volume does not
typically vary based on demand but is rather based on volume targets established to maintain a reputation
of exclusivity and scarcity among purchasers of their cars. Manufacturers deliberately monitor and maintain
their product volumes and delivery wait-times to promote their reputation, while being sensitive to local
client expectations in particular markets. In addition, manufacturers within this segment enhance the
uniqueness of particular models by bespoke customisations, variants and derivatives to meet the demands
of their customers.
The low volume strategy, combined with the quality and performance of the cars produced, has typically
allowed HLS car manufacturers to charge high average selling prices, which, through continual
improvement in performance, technology, quality and other features, have trended up over time.
Jon39 said:
Thank you for your comments.
Referring to your EU emmisions point, can perhaps AML benefit from any type of low volume rule ?
What happens when not having any small engines in their range ?
The EU rules are based on CO2 reduction targets (typically set as a percentage of 2007 numbers for 2015 targets and then, I believe, that 2015 base for 2020).
However for manufacturers with between 1,000 and 10,000 EU car sales (AML are never going to exceed that number, even with St Athan running at full capacity) the target is set by an individual negotiation with the EU, with the target intended to reflect what can be reasonably achieved based on the starting position and nature of the cars being manufactured- ie Koenigsegg won’t have the same target as a small volume truck manufacturer. I’m not sure AML have published what their individual target is (and Brexit makes things ‘interesting my
That reduction target is surely some of the motivation we’ve seen in recent years for the move to the twin-turbo V12 (with cylinder bank deactivation) and the greater use of the V8. And of course further down the line a V6 hybrid has been discussed elsewhere. As an aside the fines for failing to hit these targets are relatively small (for a low volume, high margin manufacturer). Of course I’m sure AML would rather avoid them...
Not sure emissions have any influence whatsoever on the deal that this thread relates to (sorry!). As I/Jon/others have mentioned AML counts the sale of the car when it’s sold to the dealer. So these cars were already sold as far as they were concerned for emissions purposes.
So this deal is all about clearing excess stock from the network. We can all speculate on the motivation for that (I’m sure space for DBX is a factor)
Surely to early for DBX? - must just be a help/push for 31 Dec 2019 FY figures.
Dealers buying Vantage stock replacements at a bigger discount so covering loss on recent deal cars? (too many for a one-off one dealer action? or is it just one dealer network?) Maybe don't have to register replacements for another quarter? Although a UK AML sales hit/fall (plus car new market overall) hits dealers cash flow/commissions etc too.
Do dealers also make money from AML on the service deal?
Dealers buying Vantage stock replacements at a bigger discount so covering loss on recent deal cars? (too many for a one-off one dealer action? or is it just one dealer network?) Maybe don't have to register replacements for another quarter? Although a UK AML sales hit/fall (plus car new market overall) hits dealers cash flow/commissions etc too.
Do dealers also make money from AML on the service deal?
I assume AML must pay something to the dealers on the servicing they do under the plan?
It might be too early for DBX. But I’m guessing some element of the the thinking is that AML will want to give dealers confidence to order stock DBX (if AML needs them too) with the dealers knowing manufacturer support will be forthcoming if needed. I’m just speculating - I probably should ask a dealer what the thinking is at some point...
It might be too early for DBX. But I’m guessing some element of the the thinking is that AML will want to give dealers confidence to order stock DBX (if AML needs them too) with the dealers knowing manufacturer support will be forthcoming if needed. I’m just speculating - I probably should ask a dealer what the thinking is at some point...
Just rewinding a bit as to whom is Going to take the hit , I am sorry but there is no way the finance company BMW owned is taking the hit in 2 years time when all the cars come back in, they are going into this with their eyes open
I think a lot of the older forum members like to pay for cars, there’s no way any of my hard earned will be re invested into aml, as I said a long time ago when I was looking to swap my vantage the amount offered on px was insulting and couple that with the depreciation on the new car I would have been looking for some rope,
Good look to all who have taken advantage of the deal, I just worry where the pass the parcel stops in 2 years time and who are left with the loss , aml , the dealer , the finance house ,?
I think a lot of the older forum members like to pay for cars, there’s no way any of my hard earned will be re invested into aml, as I said a long time ago when I was looking to swap my vantage the amount offered on px was insulting and couple that with the depreciation on the new car I would have been looking for some rope,
Good look to all who have taken advantage of the deal, I just worry where the pass the parcel stops in 2 years time and who are left with the loss , aml , the dealer , the finance house ,?
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