AML - Stock Market Listing

[Cheib]

Jon39 said:

My attempt at applying logic.

The 'Second Century Plan' (SCP) so far has 3 core models.
That is exactly the same, as the period under Ford ownership.

Throughout the whole of the Company's history, sustained profitability has never been achieved.
The best financial period for the business was during the Ford era, when there were several profitable years, however that was the result of a big proviso.
Ford reimbursed all of the vehicle development costs, and being debt free there were no interest costs to pay.

Therefore, in comparison with the Ford era, how could the SCP possibly work financially, before the flow of additional revenue from the SUV ? An identical business model, but with huge additional costs. Enormous vehicle development expenduture including a new factory, considerable debt servicing costs and the extra cost of an increasing number of employees.

I think that explains the money out being more than money in, but to make things even worse, and this was probably not part of the SCP, unfortunately sales of the core models did not meet expectations. DB9 and gen 1 Vantage, outsold DB11 and gen 2 Vantage.

The continual need for more money resulted in increased debt, which possibly nearly became overwhelming.

Do you think this makes sense?

To me Aston’s big problem is it is sub-scale...most manufacturers of a similar size are effectively a branding exercise of a major manufacturer. Bentley, Rolls Royce, Lamborghini etc etc all build a broadly similar amount of cars to Aston but in their case they are either owned by VW or BMW. I very much doubt Bentley or Lamborghini could make a Bentayga or Urus profitably without VW and Rolls Royce could make a Cullinan without BMW.

The obvious one that isn’t is Ferrari but they have a brand beyond compare in the automotive world and are a unique case. And obviously for a long time will have benefited from being part of Fiat.

I still think the best home for Aston is being part of Daimler AG...they obviously now buy in a huge amount of their tech and engines from them so in some ways they are half way there.

I honestly think the only solution long term for Aston is being owned by Daimler. No other manufacturer can or will buy them because of the Daimler tie in so they’re really the only game in town.

[cardigankid]

Cheib said:

To me Aston’s big problem is it is sub-scale...most manufacturers of a similar size are effectively a branding exercise of a major manufacturer. Bentley, Rolls Royce, Lamborghini etc etc all build a broadly similar amount of cars to Aston but in their case they are either owned by VW or BMW. I very much doubt Bentley or Lamborghini could make a Bentayga or Urus profitably without VW and Rolls Royce could make a Cullinan without BMW.

And please don't imagine any of that is a bad thing. The new Continental GT, in W12 or V8 forms, is a brilliant expression of the Bentley concept, and perhaps the best Sports/GT on the planet, ever. it's got depth of development and quality that Aston Martin, for all its undoubted style, could only dream about. That is the benchmark, and only Daimler could deliver it. IMHO they won't pay a billion sterling for it, so I would expect that some haircuts, an administration and pre-pack, possibly with fringe benefits for Lawrence Stroll may be in store. Is LS still going to put £200m into this mess? I seriously doubt it.

Incidentally, for those of you who recall, and possibly questioned my judgement, when I suggested that they cut the marketing department back, you should take a look at what another prestige car company in desperate straits is about, and the number of fashionable luvvies they are paying to help them.

Take a look at the latest issue of Jaguar magazine. This may work -

https://magazine.jaguar.com/the-jaguar-06/63015568...

Frankly it makes me gag (though some nice pics of an old XJC) and how much did that little lot cost?

Edited by cardigankid on Saturday 29th February 09:25

[hornbaek]

I just cant see why Daimler Benz should have any interest in AML (other than a supplier of engines and in-car electronics). Adding app 6.000 to their total volume hardly makes a change to their business and i believe that they have challenges enough on their own and would not like a turn-around of AML to be added to the list. If they had had an interest in AML they would have shown their hand long time ago. The future of AML is in the hands on Mr Stroll and he could well be added to the list of the billionaires of their time piling money into a vanity project. With Aston that has been the only recurring feature over its long and fragile history.

[Toffee88-V12VS]

I'm not sure that for Stroll this is a vanity project, a family project, yes, and one that speaks to his genuine enthusiasm for cars. Merc/DB could not step in now, as AM's current ties with Red Bull would have been a real complication. However, AMG's current partnership with AM on engines is the thin end of the wedge, and indicates that Merc do have a long-term interest in having a luxury brand at the top of the portfolio. AM, Ferrari, Lamborghini, these companies are all about the brand not the cars, even though for all of us, it isthe cars. The big guys buy the brands, with no real expectation of making any return. For Ferrari, F1 is front, center and back. For Merc, F1 must be worth at least a billion annualy in effective marketing dollars.

Merc now have a future option to take control of AM, contemporaneously switching their headline F1 involvement to a Merc-AM works team; they will first see how it goes in F1 with Stroll from 2021. And, Stroll, no doubt has made the same calculation - its a win-win, indulge family and hobby for now, and then sell out at a nice return to Merc later. Interesting times.

[Cheib]

hornbaek said:

I just cant see why Daimler Benz should have any interest in AML (other than a supplier of engines and in-car electronics). Adding app 6.000 to their total volume hardly makes a change to their business and i believe that they have challenges enough on their own and would not like a turn-around of AML to be added to the list. If they had had an interest in AML they would have shown their hand long time ago. The future of AML is in the hands on Mr Stroll and he could well be added to the list of the billionaires of their time piling money into a vanity project. With Aston that has been the only recurring feature over its long and fragile history.

They already have an interest....they own 5% already.

[Emilio Largo]

Toffee88-V12VS said:

For Merc, F1 must be worth at least a billion annualy in effective marketing dollars.

Merc now have a future option to take control of AM, contemporaneously switching their headline F1 involvement to a Merc-AM works team; they will first see how it goes in F1 with Stroll from 2021. And, Stroll, no doubt has made the same calculation - its a win-win, indulge family and hobby for now, and then sell out at a nice return to Merc later. Interesting times.

And what is supposed to be the outcome of this wild theory in the end? Aston Martin F1 to vanish again after the team has been sold to Daimler?

None of this will happen. Mercedes-Benz is a world wide renown brand with a long Formula 1 history. Aston Martin just isn´t. Outside UK and America no-one knows what Aston Martin is (exaggerating a bit but you get my point). Same applies to most of the Formula 1 viewers and those amongst them who do know the brand cannot be fooled by a marketing trick (buy a team and re-brand it). A Formula 1 engagement will be just another pointless financial engagement with no benefit for AML. I don´t believe for one second this "AM" team will be anything near competitive to the F1 top teams. My forecast is they will drive far behind them and no-one will take any notice as second or third rate F1 teams just don´t get the necessary media attention. In this sense, yes, I think it is a very personal preferance ("vanity project") of Mr Stroll.

AML/AMR should stay in endurance racing. That is where the marque belongs. Keeping up this engagement could at least keep the existing customers/fans with the brand whereas with Formula 1 there is nothing to win but only to lose.

[Cheib]

Toffee88-V12VS said:

And, Stroll, no doubt has made the same calculation - its a win-win, indulge family and hobby for now, and then sell out at a nice return to Merc later. Interesting times.

I don’t think Stroll can make a nice return by selling to Daimler....they have absolutely no need to pay up for Aston. If they wanted to buy it for £1bil they could have done that two months ago.

The problem for Stroll is that Aston are totally reliant on Mercedes/AMG for production of their road cars and...so Daimler have a very powerful negotiating position if they wanted to buy AML and also have a similarly strong negotiating position if any other manufacturer wanted to buy Aston.

[RL17]

Emilio Largo said:

Toffee88-V12VS said:

For Merc, F1 must be worth at least a billion annualy in effective marketing dollars.

Merc now have a future option to take control of AM, contemporaneously switching their headline F1 involvement to a Merc-AM works team; they will first see how it goes in F1 with Stroll from 2021. And, Stroll, no doubt has made the same calculation - its a win-win, indulge family and hobby for now, and then sell out at a nice return to Merc later. Interesting times.

And what is supposed to be the outcome of this wild theory in the end? Aston Martin F1 to vanish again after the team has been sold to Daimler?

None of this will happen. Mercedes-Benz is a world wide renown brand with a long Formula 1 history. Aston Martin just isn´t. Outside UK and America no-one knows what Aston Martin is (exaggerating a bit but you get my point). Same applies to most of the Formula 1 viewers and those amongst them who do know the brand cannot be fooled by a marketing trick (buy a team and re-brand it). A Formula 1 engagement will be just another pointless financial engagement with no benefit for AML. I don´t believe for one second this "AM" team will be anything near competitive to the F1 top teams. My forecast is they will drive far behind them and no-one will take any notice as second or third rate F1 teams just don´t get the necessary media attention. In this sense, yes, I think it is a very personal preferance ("vanity project") of Mr Stroll.

AML/AMR should stay in endurance racing. That is where the marque belongs. Keeping up this engagement could at least keep the existing customers/fans with the brand whereas with Formula 1 there is nothing to win but only to lose.

Agree on this as AM history in F1 is pitiful

Daimler (MB) stake now down to 4.2% and getting a good rerturn on old tech and engine development. Their operations on core brands and no need for AM. AM might have made sense in a VW Grouptype set up 10 years ago

[Jon39]

RL17 said:

Daimler (MB) stake now down to 4.2% and getting a good rerturn on old tech and engine development. Their operations on core brands and no need for AM. AM might have made sense in a VW Grouptype set up 10 years ago

I am also in the camp of, cannot see what benefit it would be to Daimler.

The production volume means nothing to Mercedes-Benz.
As for brand and market segments, Mercedes already have a premium image, a leading position in Formula One, think they are now in Formula E, they have sports cars, and teams who race their sports cars. They have made SUVs for years, a hypercar has also been announced by Mercedes.

[Ken Figenus]

I am personally very cynical of the whole kudos and actual ROI of the F1 thing to a road car manufacturer by now. I don't think it was always so - Ferrari putting the F1 sequential gearbox in road cars was a masterstroke and a game changer. Other than that the connection to any road car seems tenuous. Its just about brand association I guess.

Also in making watching F1 £25 a month on SKY they haemorrhaged 8.6 million viewers overnight in UK alone https://www.pitpass.com/66446/F1-loses-86-million-.... Most people only see a clip of a race at the end of the news and talk of Lewis Hamilton. They arent creating new interest and new audience and the whole green thing makes the whole operation increasingly anachronistic, sadly. Its my view that Aston should have nothing to do with it - seeing an AM logo on a helmet visor for a car powered by Renault or Honda does nothing for me. Ironically Netflix have probably done more to promote new interest in F1 despite many F1 big players' refusal to engage!

WEC is different though and far more real - I think it creates genuine links to product and development that are valuable and at a far lower cost. Whether its affordable and wise currently is another thing.

I expect equal but opposite views in any democracy, from all armchairs

[RL17]

Racing Point involvement starting already with 100 Aston employees going or to be employed on the team

https://www.formula1.com/en/latest/article.racing-...


Daimler is all about the Mercedes-Benz name and brand. The sub brands Mercedes-AMG and Mercedes-Maybach are just special versions of Mercedes cars and had heavy connections with Mercedes before being acquired. (Maybach left Mercedes and set up the company as engine builder for Zeppelins and then other heavy commercial engines, acquired in 1960s or so by Daimler - engine builder now Rolls-Royce Friedrichshafen). So really a one brand company and not a stable of car brands like most.

Mercedes- AMG and Mercedes-AML never going to happen IMO

And just like cars Mercedes will make money selling to the F1 team (engine prices will go up now it's Aston Martin and not just Racing Point) and just like the cars Mercedes will make money selling last year's stuff as never going to put the best engines in another F1 team.

Flotation and plc status costly and a bit of a diversion for management a couple of years ago but that main reason for current state of the business is the cars and all focus should be on getting that right. They are a plc and changing that now isn't going to help the business.

AP must be focusing on that, better cars. God help AML if he's up at night worrying about the possible existence of change of control clauses in bond documentation.

[JB65]

MB has never taken a VW like strategy (Maybach and AMG were in house brands) and therefor an unlikely candidate.
Besides - the car industry is undergoing a truly existential crisis - investing billions in EV that will not pay off any time soon and punters delaying purchases due to uncertainty on future car values - even before we were faced with a Covid19/global slowdown. Expect their focus to be on core business and efficiencies.
Am afraid Mr Stroll is our only hope which might not be a bad thing - a wealthy, passionate car enthusiast with a sharp nose for turning around companies - probably the best we could have hoped for (or ever had in AM history ).

Edited by JB65 on Sunday 1st March 14:49

[anonymous-user]

I thought Merc bought AMG a while back?

[JB65]

True - created by 2 MB development engineers (Aufrecht and Melcher) who initially developed a 300SE performance car while working at MB (in their spare time even I believe) and later pursued that independently when MB didn’t show interest. Later on MB acquired the company. AMG were always souped up MB's.

[Toffee88-V12VS]

Glad my "wild theory" generated so much discussion! At the risk of bringing further opprobrium upon myself, I would mention, only in passing, that the commercial heart and technical soul of the Merc F1 team which has already had such unprecedented success, lies in Britain not Germany - both chassis and power-train. And it is run by an Austrian CEO. Moreover, the split leadership paradigm (commercial and technical) which is the holy cow of German corporate culture, is unusually absent from the German F1 team - with Toto Wolf having singular management responsibility for all aspects of the operation. (The departures of Haug and later Lowe, from Merc, coinciding with the consolidation of the management of the F1 team under a singular operational structure.)

I might also add that the last time Ferrari could lay claim to being F1's preeminent team, was under distinctly British technical and operational management. It seems that the aforementioned factors were not lost on Mercedes when they bought the Brawn F1 team.

I would not under-estimate the value of AML's uniquely British brand, nor its proud British engineering heritage and current capability, and I would certainly challenge the idea that, "Outside UK and America no-one knows what Aston Martin is...", the latter seems a highly dubious proposition for a multitude of reasons. Similarly, the notion that, "Aston are totally reliant on Mercedes/AMG for production of their road cars...", seems far fetched at best, and I would be very interested to understand the basis for such a bold claim.

AMG's 5% stake, so far, in AML, is a recognition of the value of AML as a brand and an engineering company, and I would argue is a mutually symbiotic partnership. Stroll is no Abramovich-style premier league investor; he is self-made and a shrewd businessman, albeit that his passion for his son and cars played a role in his rescue of AML.

Maybe the best is yet to come for AML with such savvy investors behind it. And who knows what wild structures may lay in the future.

[Jon39]

Toffee88-V12VS said:

..... the commercial heart and technical soul of the Merc F1 team which has already had such unprecedented success, lies in Britain not Germany - both chassis and power-train. .....


AMG's 5% stake, so far, in AML, is a recognition of the value of AML as a brand and an engineering company, .....

You probably know, that the Britishness came from the very beginning of the Mercedes F1 limited company.
Check the company number.
The original company incorporation was for premises in rural Surrey. The company built a World Championship winning Formula One car in a wooden shed. Ferrari could just not keep up. How very British!

The 5% shareholding began when Dr Bez signed the supply contract with Daimler. I have wondered but never discovered, whether Mercedes Benz paid for their holding in AML, or if they were given newly issued shares as part of the deal.

Edited by Jon39 on Sunday 1st March 20:01

[Toffee88-V12VS]

I didn't know that, and thanks for enlightening me...it does reinforce what I was trying to say! Whether it is trains, transformers or cars (probably also washing machines as well), I believe there are over two hundred years of technology and engineering links between the Germans and us.

[Jon39]

Toffee88-V12VS said:

I didn't know that, and thanks for enlightening me....

Yes, Ken Tyrrell incorporated on the 9th January 1964, what is now (after a few name changes) the Mercedes-Benz Grand Prix Limited company.

Five different teams along the way, the most successful being the first and the last. Imagine the enormous difference in budgets of Tyrrell (1 constructors and 3 driver championships) and Mercedes-Benz.

[RichB]

Jon39 said:

You probably know, that the Britishness came from the very beginning of the Mercedes F1 limited company.
Check the company number. The original company incorporation was for premises in rural Surrey. The company built a World Championship winning Formula One car in a wooden shed. Ferrari could just not keep up. How very British!

And it was indeed a wood yard with some offices and 3 sheds! I visited several times in the mid '80s when Brundle & Streiff were driving, it was around that time I got to know Damon too. A much easier going time in F1...

[nite_narc]

I have yet to be fully convinced that Mercedes wouldn't benefit from acquiring AML. The F1 tie-in has strengthened my resolve in this department.

Mercedes could create a Red Bull/Torro Rosso (Alpha Tauri) development programme using the new Aston Martin team built from the existing Racing Point relationship. This would help their driver programme, which they currently have to rely on other teams to give them track experience or their reserve driver slot.

Mercedes' product line-up has no conflict with AMLs. The AMG GT/GTR overlaps the Vantage but otherwise, AML offers a halo brand for them to develop trickle-down tech. The AMG-One was their attempt at this and the success, or lack thereof, in this department shows ambition in this department. AML gives them a brand to fit this sector.

Lagonda would give MB a third brand to explore electrification, autonomous tech without throwing the MB name at it.

There's no doubt that AML would be the winner in any acquisition, especially by MB, but I don't think the takeover would be entirely one-sided.