AML - Stock Market Listing
Discussion
oilit said:
Jon, you need your lower cost models to be in demand…as well as your higher end models.
My guess is, that after adjusting for the change in the value of money;
DB7 was more expensive than the 2018 Vantage.
The 2005 Vantage was the same cost as the 2018 Vantage.
Anyway, as you have rightly point out, it is now who offers the biggest SUV.
AdamV12V said:
Which would you rather make, 4 cars that make £25,000 profit each or 1 car that makes £100,000 profit?
It's simple - you don't want to be a busy fool working 4x as hard as you need to, if you are capable of selling the profit models instead.
It's simple - you don't want to be a busy fool working 4x as hard as you need to, if you are capable of selling the profit models instead.
Certainly makes sense, but when thinking about lower production, higher profit margin per car, another problem arises.
Two factories, both now presently running at half capacity. That would be a difficult decision, which factory should close ?
AdamV12V said:
Which would you rather make, 4 cars that make £25,000 profit each or 1 car that makes £100,000 profit?
It's simple - you don't want to be a busy fool working 4x as hard as you need to, if you are capable of selling the profit models instead.
But are they?It's simple - you don't want to be a busy fool working 4x as hard as you need to, if you are capable of selling the profit models instead.
I'm in the 'have an entry level model' camp. TVR expired because their genius leader died and it was taken over by monkeys who pitched the cars at a level they couldn't compete in because they thought it would make loads of money. Greed and believing their own BS - sound familiar?
Yes you need to make a profit, but in a way - and at least while Aston is on the ropes - I'd rather have 4x cars at 1/4x the profit because you get sales and a ladder for customers to go up. If your cheapest model is £250K they'll buy from a rival instead. It's a great mistake to think your company is bigger or better than it actually is; eventually 'talk' has to turn into 'walk'.
Jon39 said:
Certainly makes sense, but when thinking about lower production, higher profit margin per car, another problem arises.
Two factories, both now presently running at half capacity. That would be a difficult decision, which factory should close ?
https://www.whichcar.com.au/news/aston-martin-at-c...
Peavey123 said:
... Right now, the maximum theoretical capacity with all the stops pulled out is a claimed 27,000 units – 12,000 in Gaydon and 15,000 in St Athans, Wales – which only opened in November 2019.
Those numbers don't seem right.
1.) First go back quite a way.
Gaydon reached 7,200.
That left no additional capacity for production of the new Rapide model.
Therefore arrangements were made for Rapides to be assembled in Austria.
2.) Now go back to the Andy Palmer era.
Plans were made for up to 7,000 Sports/GT and 7,000 SUV.
In view of 1.) additional capacity was anticipated, so St. Athan was prepared.
In both cases, the expectation was wrong and it turned out that the single Gaydon factory could have coped after all..
In case 1.) the 2008 financial crisis reduced demand.
In case 2.) Sports /GT demand reduced. I won't suggest any reasons why that happened.
Case 1.) was resolved by buying out the contract and bringing the Rapide assembly to Gaydon.
Case 2.) no resolution yet.
The Welsh plant is leased (think it was 25 years, guaranteed by the Welsh Government).
It would be a shame to loose Gaydon (effectively a gift from Ford).
Forfeiting a prestige HQ facility, for a few aircraft hangers.
Jon39 said:
Those numbers don't seem right.
1.) First go back quite a way.
Gaydon reached 7,200.
That left no additional capacity for production of the new Rapide model.
Therefore arrangements were made for Rapides to be assembled in Austria.
2.) Now go back to the Andy Palmer era.
Plans were made for up to 7,000 Sports/GT and 7,000 SUV.
In view of 1.) additional capacity was anticipated, so St. Athan was prepared.
In both cases, the expectation was wrong and it turned out that the single Gaydon factory could have coped after all..
In case 1.) the 2008 financial crisis reduced demand.
In case 2.) Sports /GT demand reduced. I won't suggest any reasons why that happened.
Case 1.) was resolved by buying out the contract and bringing the Rapide assembly to Gaydon.
Case 2.) no resolution yet.
The Welsh plant is leased (think it was 25 years, guaranteed by the Welsh Government).
It would be a shame to loose Gaydon (effectively a gift from Ford).
Forfeiting a prestige HQ facility, for a few aircraft hangers.
Jon39 said:
AdamV12V said:
Which would you rather make, 4 cars that make £25,000 profit each or 1 car that makes £100,000 profit?
It's simple - you don't want to be a busy fool working 4x as hard as you need to, if you are capable of selling the profit models instead.
It's simple - you don't want to be a busy fool working 4x as hard as you need to, if you are capable of selling the profit models instead.
Certainly makes sense, but when thinking about lower production, higher profit margin per car, another problem arises.
Two factories, both now presently running at half capacity. That would be a difficult decision, which factory should close ?
The Vantage needs to become AM's Cayman. It doesn't even matter if it's only making a marginal profit because of the other benefits such a strategy would bring. You get more people into the brand due to the low entry price, you see more cars on the road, which increases brand awareness and drives interest in other models. It's social proof that the product is popular, and people jump on the bandwagon as a result. AML should be aiming for a 90k base price for an entry-level Vantage.
In its entirety, the range doesn't have enough vertical potential. AM keep releasing special editions and limited editions to eek out higher margins, what they should do is lower the starting price and optimise inclusions. The target should be a 50% uplift in specced options. Adopting a Ferrari/Porsche approach to the options list would be a faster route to increased average sale prices and higher margins.
Finally, AML needs to go private again. The focus is in the wrong place while the priority is dividend and share prices and not customers and products.
Rant over.
nite_narc said:
Doesn't count for much, but here's a marketing perspective. .....
..... The focus is in the wrong place while the priority is dividend and share prices and not customers and products.
..... The focus is in the wrong place while the priority is dividend and share prices and not customers and products.
Makes sense to me. That strategy worked successfully in the VH era, but there were probably also other aspects involved then.
Had to laugh at your mention of dividend. -
AM paying a dividend is such a distant dream, that even LS has never mentioned it.
His frequently repeated target, "10,000 wholesales, £2 billion in revenue and £500 million in adjusted EBITDA by 2024 to 2025",
makes no reference to producing a net profit.
No net profit, equals no money to pay a dividend.
Peavey123 said:
That is a fascinating article. Multimatic is an extraordinary operation. They produce the Ford GT, for Aston Martin they produced the Taraf and the CC Speedster, among others. They state on their website that they can produce a one-off concept car in 18 weeks. Looking at that, if LS owned the brand, just the badge, he could commission Multimatic to produce any number of ultra expensive (ultra luxury?) limited edition specials, and then just exploit the brand any other way he likes. If that is the plan, what would he need a factory, or a whole lot of employees for?
Personally, I find that deeply unappealing, indeed a negation of what Aston Martin should be. If it is a series of £2.5m hypercars bought by the ultra wealthy as collectors items, is it really a car or just so much sexy metal? I think that it would in fact kill the brand's desirability. The average ambitious, reasonably affluent individual must be able, with some effort and assisted by finance, to get on the ladder, just as at Porsche or indeed McLaren. As SimpoTwo and NiteNarc said, you need a desirable entry level car. Otherwise the brand simply becomes irrelevant, and those buyers go elsewhere. The Cayman and Boxster are wonderful cars, but they don't stop Porsche selling 911's or anything else.
The really big problem remains the electric challenge, which IMHO is going to bring the whole show to a stop whatever else happens.
nite_narc said:
Doesn't count for much but here's a marketing perspective.
The Vantage needs to become AM's Cayman. It doesn't even matter if it's only making a marginal profit because of the other benefits such a strategy would bring. You get more people into the brand due to the low entry price, you see more cars on the road, which increases brand awareness and drives interest in other models. It's social proof that the product is popular, and people jump on the bandwagon as a result. AML should be aiming for a 90k base price for an entry-level Vantage.
In its entirety, the range doesn't have enough vertical potential. AM keep releasing special editions and limited editions to eek out higher margins, what they should do is lower the starting price and optimise inclusions. The target should be a 50% uplift in specced options. Adopting a Ferrari/Porsche approach to the options list would be a faster route to increased average sale prices and higher margins.
Finally, AML needs to go private again. The focus is in the wrong place while the priority is dividend and share prices and not customers and products.
Well said. That's what I meant, but you said it better.The Vantage needs to become AM's Cayman. It doesn't even matter if it's only making a marginal profit because of the other benefits such a strategy would bring. You get more people into the brand due to the low entry price, you see more cars on the road, which increases brand awareness and drives interest in other models. It's social proof that the product is popular, and people jump on the bandwagon as a result. AML should be aiming for a 90k base price for an entry-level Vantage.
In its entirety, the range doesn't have enough vertical potential. AM keep releasing special editions and limited editions to eek out higher margins, what they should do is lower the starting price and optimise inclusions. The target should be a 50% uplift in specced options. Adopting a Ferrari/Porsche approach to the options list would be a faster route to increased average sale prices and higher margins.
Finally, AML needs to go private again. The focus is in the wrong place while the priority is dividend and share prices and not customers and products.
cardigankid said:
.... Looking at that, if LS owned the brand, just the badge, he could commission Multimatic to produce any number of ultra expensive (ultra luxury?) limited edition specials, and then just exploit the brand any other way he likes.
... If that is the plan, what would he need a factory, or a whole lot of employees for?
... Personally, I find that deeply unappealing, indeed a negation of what Aston Martin should be.
... If that is the plan, what would he need a factory, or a whole lot of employees for?
... Personally, I find that deeply unappealing, indeed a negation of what Aston Martin should be.
Exactly what Mr. Les Edgar did with the TVR brand name.
For Multimatic, read Gordon Murray Automotive.
One car built.
5 years after pretending to revive TVR, only the Gordon Murray built car exists and hopeful customers who paid their deposits, never received their cars.
Disgraceful.
IMO there's only one real way forward.
For Mercedes to do for/to Aston Martin exactly what VAG did for/to Bentley.
Let the parent company shoulder the development burden (whilst the luxury brand adds useful units to the business case for these expensive upper-end platforms) and let the superior-but-smaller brand bring in high-margin sales, and do some pleasing overall burnishing of the parent corporate halo.
For Mercedes to do for/to Aston Martin exactly what VAG did for/to Bentley.
Let the parent company shoulder the development burden (whilst the luxury brand adds useful units to the business case for these expensive upper-end platforms) and let the superior-but-smaller brand bring in high-margin sales, and do some pleasing overall burnishing of the parent corporate halo.
SpeckledJim said:
IMO there's only one real way forward.
For Mercedes to do for/to Aston Martin exactly what VAG did for/to Bentley.
Let the parent company shoulder the development burden (whilst the luxury brand adds useful units to the business case for these expensive upper-end platforms) and let the superior-but-smaller brand bring in high-margin sales, and do some pleasing overall burnishing of the parent corporate halo.
I have been saying exactly this for months. It’s the only viable long term solution imho. The key question is whether they would be prepared to absorb the debts first or wait until AM declares itself insolvent, and then pick up the remnants on the cheap. For a company the size of Daimler MB, or indeed any of the other potential suitors, the numbers involved are chicken feed really. It really is the only answer though, especially considering the future electrification world etc. And as we have discussed on here before it has done no harm at all to Bentley, Lamborghini, and Rolls Royce etc. It may annoy the traditionalists, but surely it would be better than potentially losing the AM name forever. For Mercedes to do for/to Aston Martin exactly what VAG did for/to Bentley.
Let the parent company shoulder the development burden (whilst the luxury brand adds useful units to the business case for these expensive upper-end platforms) and let the superior-but-smaller brand bring in high-margin sales, and do some pleasing overall burnishing of the parent corporate halo.
Best Regards
Minglar
AdamV12V said:
Which would you rather make, 4 cars that make £25,000 profit each or 1 car that makes £100,000 profit?
It's simple - you don't want to be a busy fool working 4x as hard as you need to, if you are capable of selling the profit models instead.
Yeah but no but yeah.It's simple - you don't want to be a busy fool working 4x as hard as you need to, if you are capable of selling the profit models instead.
The latter one is a lower risk proposition. If you sell 3x cars, you stay in business. If you don't sell that one car, you go bust. In the 70s, Aston were making a handful of cars a year. They were charging huge amounts for them. It wasn't a profitable time.
Looks like some of the AM sponsorship money is going into bricks and mortar (or aluminium and glass!!)
https://www.constructionenquirer.com/2022/08/10/me...
https://www.constructionenquirer.com/2022/08/10/me...
oilit said:
Looks like some of the AM sponsorship money is going into bricks and mortar (or aluminium and glass!!)
https://www.constructionenquirer.com/2022/08/10/me...
The construction company involved has a suitable name at least !https://www.constructionenquirer.com/2022/08/10/me...
AstonZagato said:
AdamV12V said:
Which would you rather make, 4 cars that make £25,000 profit each or 1 car that makes £100,000 profit?
It's simple - you don't want to be a busy fool working 4x as hard as you need to, if you are capable of selling the profit models instead.
Yeah but no but yeah.It's simple - you don't want to be a busy fool working 4x as hard as you need to, if you are capable of selling the profit models instead.
The latter one is a lower risk proposition. If you sell 3x cars, you stay in business. If you don't sell that one car, you go bust. In the 70s, Aston were making a handful of cars a year. They were charging huge amounts for them. It wasn't a profitable time.
Anyway with hard times ahead for the majority of folk, top end is more likely to continue than the bottom end. Rich are always rich and a recession won't change much, the middle incomes however (along with the poor - just not relevant to this discussion), will be hit much much harder.
oilit said:
Looks like some of the AM sponsorship money is going into bricks and mortar (or aluminium and glass!!)
https://www.constructionenquirer.com/2022/08/10/me...
https://www.constructionenquirer.com/2022/08/10/me...
£200 million for a replacement factory building.
Apparently required, just to make two cars go slightly faster.
https://www.formula1.com/en/latest/article.aston-m...
Jordan were able to win races, with cars built in the existing factory.
Would you believe it ?
In years gone by, when Formula One was just a sport, a British team showed how to beat Ferrari and won world championships.
Their cars were built in a second hand (Pre-owned), ex-Military wooden shed !
Blazer, tie, enthusiasm and team spirit.
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