Aston Residuals debate..... your thoughts?
Discussion
bogie said:
as I said earlier, I dont think residuals are *that* bad are they? Ive never owned any car thats managed to keep 50% after 3 years so far other than my old Lotuse Elise, so the modern Astons are doing well arnt they?
)
Yes, they are horrendous. Price to change my 07 Vantage for a new 4.7?)
That'll just be £40K sir.
b
ks it will.They are seriously going to be left with a massive number of unsold cars (which are already building up at the dealerships) and will end up giving huge discounts to get rid of (thereby compounding the problem).
Bearing in mind that there are still quite a number of 4.3's unsold and you get the picture.
My dealer (one of the largest in terms of actual cars sold per year) has the grand total of 1 (count them) new cars going out today.
1st of September and they have a solitary new customer.
It's actually worse than I thought.
The only aspects of residuals which really interest me are 1. How cheap can I buy the car I want, and 2. What part does it play in keeping our favoured manufacturers going.
Example. Aston Martin in the 70's and 80's was constantly dicing with extinction, and the residuals on V8's were diabolical. Rolls Royce produced 42000 Shadows between 1965 and 1981, and the residuals were very solid indeed. Both were imho excellent cars. The sign that Aston had turned the corner with the DB7 that I particularly remember was that residuals suddenly firmed up - it is only relatively recently that you have been able to buy a DB7 much under £50k.
Most of the top outfits are now selling in large numbers, not the kind of handbuilt handful that used to be the business model. Has any car company selling 5,000 cars a year plus survived when the residuals went through the floor? My point is we may say that residuals are only of interest to accountants, but what if they are vital to the survival of the companies? What is going to happen next?
Example. Aston Martin in the 70's and 80's was constantly dicing with extinction, and the residuals on V8's were diabolical. Rolls Royce produced 42000 Shadows between 1965 and 1981, and the residuals were very solid indeed. Both were imho excellent cars. The sign that Aston had turned the corner with the DB7 that I particularly remember was that residuals suddenly firmed up - it is only relatively recently that you have been able to buy a DB7 much under £50k.
Most of the top outfits are now selling in large numbers, not the kind of handbuilt handful that used to be the business model. Has any car company selling 5,000 cars a year plus survived when the residuals went through the floor? My point is we may say that residuals are only of interest to accountants, but what if they are vital to the survival of the companies? What is going to happen next?
cardigankid said:
The only aspects of residuals which really interest me are 1. How cheap can I buy the car I want, and 2. What part does it play in keeping our favoured manufacturers going.
Example. Aston Martin in the 70's and 80's was constantly dicing with extinction, and the residuals on V8's were diabolical. Rolls Royce produced 42000 Shadows between 1965 and 1981, and the residuals were very solid indeed. Both were imho excellent cars. The sign that Aston had turned the corner with the DB7 that I particularly remember was that residuals suddenly firmed up - it is only relatively recently that you have been able to buy a DB7 much under £50k.
Most of the top outfits are now selling in large numbers, not the kind of handbuilt handful that used to be the business model. Has any car company selling 5,000 cars a year plus survived when the residuals went through the floor? My point is we may say that residuals are only of interest to accountants, but what if they are vital to the survival of the companies? What is going to happen next?
Most DB7 vantages are below £35,000 now, and the 3.2s are almost all under £30k even for 20,000 mile minters. I don't know if they will stay there, but picking up a 2003 DB7 Vantage in say 3-4 years for £20,000 would be quite nice!Example. Aston Martin in the 70's and 80's was constantly dicing with extinction, and the residuals on V8's were diabolical. Rolls Royce produced 42000 Shadows between 1965 and 1981, and the residuals were very solid indeed. Both were imho excellent cars. The sign that Aston had turned the corner with the DB7 that I particularly remember was that residuals suddenly firmed up - it is only relatively recently that you have been able to buy a DB7 much under £50k.
Most of the top outfits are now selling in large numbers, not the kind of handbuilt handful that used to be the business model. Has any car company selling 5,000 cars a year plus survived when the residuals went through the floor? My point is we may say that residuals are only of interest to accountants, but what if they are vital to the survival of the companies? What is going to happen next?
whoami said:
bogie said:
as I said earlier, I dont think residuals are *that* bad are they? Ive never owned any car thats managed to keep 50% after 3 years so far other than my old Lotuse Elise, so the modern Astons are doing well arnt they?
)
Yes, they are horrendous. Price to change my 07 Vantage for a new 4.7?)
That'll just be £40K sir.
b
ks it will.They are seriously going to be left with a massive number of unsold cars (which are already building up at the dealerships) and will end up giving huge discounts to get rid of (thereby compounding the problem).
Bearing in mind that there are still quite a number of 4.3's unsold and you get the picture.
My dealer (one of the largest in terms of actual cars sold per year) has the grand total of 1 (count them) new cars going out today.
1st of September and they have a solitary new customer.
It's actually worse than I thought.
bogie said:
Pugsey said:
bogie said:
as I said earlier, I dont think residuals are *that* bad are they? Ive never owned any car thats managed to keep 50% after 3 years so far other than my old Lotuse Elise, so the modern Astons are doing well arnt they?
Just how many models of exotica or sportscar can you think of that are worth say 60% + after 3 years...and actually being used for say 6K miles a year
Tend to agree with you there - in fact not sure what some people are really expecting tbo. Try buying a new £25k repmobile, driving out of the showroom, then going straight back and asking 'how much's it worth' THEN you'll find out what depreciation means!Just how many models of exotica or sportscar can you think of that are worth say 60% + after 3 years...and actually being used for say 6K miles a year
...... in Autocar this week there were examples of BMWs, Bentleys, Range Rovers etc all worth 50% 1 yr old, let alone 3 years later...if people have 3 yr old Vantages which were like £85K ish, and can still get £45-50K for them, then thats pretty good IMO as a more regular £85K car would be more like £35k trade in.
...so I guess Aston Martin dealers can claim "above average residuals" regardless
Banner said:
...Who's not going to be upset with that as an owner?
Someone who did their homework before buying and fully knew what to expect. No one likes losing money, but when you buy "stuff" you expect it.
If you're really bothered about such numbers, you buy a Mundano happy that you'll lose just 4k per year or whatever. In the same way that you buy a 99p Tesco Value tuna sandwich rather than spending 100 quid on a Wagyu beef sarnie in Selfridges if you think the outlay's not worth it.
"I know of one guy who lost £17k in 9 months"
I do too - the guy who traded in mine 18 months ago, he had it barely a year, did 6k miles, the car was £17K off list then to me, so god knows what he got trade in for it...and what he paid for it with options ...yup - £90K car, £20-25K lost in under 12 months is just about par for the course these days isnt it?
Next time though, im gonna try to wait a bit longer than 10-12 months as you can get 6k mile 3yr old ones for £55K now...that will do fine for me, so I can go out and do 10-20K miles a year and not lose as much overall
I do too - the guy who traded in mine 18 months ago, he had it barely a year, did 6k miles, the car was £17K off list then to me, so god knows what he got trade in for it...and what he paid for it with options ...yup - £90K car, £20-25K lost in under 12 months is just about par for the course these days isnt it?
Next time though, im gonna try to wait a bit longer than 10-12 months as you can get 6k mile 3yr old ones for £55K now...that will do fine for me, so I can go out and do 10-20K miles a year and not lose as much overall
Confucius he say.....
"A prestige car brand who's product looses its shirt on depreciation long term will also loose its shirt on profit unless its volumes are low enough to appeal to the very wealthy only"!
Depreciation is the biggest factor in car ownership & you know it is only shrewd to reduce this as much as possible on any chosen purchase.
The current circumstances are rather extreme, credit crunch lack of confidence & new 4.7 have hit 4.3 values HARD, but if Aston shrewdly limit supply of the new model all will level out in the next year & values will firm nicely...(lets face it the Aston is VERY desirable) then we are all happy 
& we all want to be happy 
"A prestige car brand who's product looses its shirt on depreciation long term will also loose its shirt on profit unless its volumes are low enough to appeal to the very wealthy only"!
Depreciation is the biggest factor in car ownership & you know it is only shrewd to reduce this as much as possible on any chosen purchase.
The current circumstances are rather extreme, credit crunch lack of confidence & new 4.7 have hit 4.3 values HARD, but if Aston shrewdly limit supply of the new model
all will level out in the next year & values will firm nicely...(lets face it the Aston is VERY desirable) then we are all happy & we all want to be happy Edited by Grant3 on Wednesday 3rd September 23:19
cardigankid said:
Yes, I see. But can they 'limit supply of the 4.7' without busting themselves. That's some place they've got and a pretty big salary roll. Otherwise they would just scale production right down, and anyone who wanted an Aston would have to buy second hand.
Your right Cardy, but its a big old world out there & lots of growth potential in China, Russia, even India, the UK doesn't have to be the cash cow!I hear a lot about India this, China that and Russia the whatever.
1) Do they have the servicing infrastructure?
2) Do they have decent enough fuel in enough places?
3) Do they have decent enough roads enough places?
4) Do they have sufficient numbers of truly wealthy people still in those countries to create a market?
I have absolutely no doubt that India and China (Russia will end up killing itself and disintegrating IMO), in time, will be a huge market for car makers. But right here and now? And how long will it take?
It smacks of spotty uni grads straight out of education drawing up bell curves and creating models that wouldn't stand up in a stiff breeze.
What are the sales volumes of all cars, and cars in this bracket over the last 10yrs in these regions?
1) Do they have the servicing infrastructure?
2) Do they have decent enough fuel in enough places?
3) Do they have decent enough roads enough places?
4) Do they have sufficient numbers of truly wealthy people still in those countries to create a market?
I have absolutely no doubt that India and China (Russia will end up killing itself and disintegrating IMO), in time, will be a huge market for car makers. But right here and now? And how long will it take?
It smacks of spotty uni grads straight out of education drawing up bell curves and creating models that wouldn't stand up in a stiff breeze.
What are the sales volumes of all cars, and cars in this bracket over the last 10yrs in these regions?
Murph7355 said:
I hear a lot about India this, China that and Russia the whatever.
1) Do they have the servicing infrastructure?
2) Do they have decent enough fuel in enough places?
3) Do they have decent enough roads enough places?
4) Do they have sufficient numbers of truly wealthy people still in those countries to create a market?
I have absolutely no doubt that India and China (Russia will end up killing itself and disintegrating IMO), in time, will be a huge market for car makers. But right here and now? And how long will it take?
It smacks of spotty uni grads straight out of education drawing up bell curves and creating models that wouldn't stand up in a stiff breeze.
What are the sales volumes of all cars, and cars in this bracket over the last 10yrs in these regions?
Aston Martin have flown their instructors over to China and they are there right now doing ride and drive events (I believe that's what they are ?), so it looks like things are going ok.1) Do they have the servicing infrastructure?
2) Do they have decent enough fuel in enough places?
3) Do they have decent enough roads enough places?
4) Do they have sufficient numbers of truly wealthy people still in those countries to create a market?
I have absolutely no doubt that India and China (Russia will end up killing itself and disintegrating IMO), in time, will be a huge market for car makers. But right here and now? And how long will it take?
It smacks of spotty uni grads straight out of education drawing up bell curves and creating models that wouldn't stand up in a stiff breeze.
What are the sales volumes of all cars, and cars in this bracket over the last 10yrs in these regions?
So there is no 'how long will it take', because it is already happening in China......
:J: said:
...
So there is no 'how long will it take', because it is already happening in China......
Do we know how many cars have been sold there, and what the order book looks like?So there is no 'how long will it take', because it is already happening in China......
Giving people freebie rides in them is one thing. Selling a couple of thousand and having the infrastructure to support them properly is another. The car's lasting properly on piss poor roads and fuel is another again.
Business is more global than ever, particularly the car trade, while the UK is clearly Aston's foundations, maximising growth in new countries is more important than ever! Balancing supply & demand in established countries, alongside quality products helps ensure long term positive brand image, hence sales! Dumping volume into the US & UK (which are in short term recession) will only undermine the brand due to heavy discounting & falling residuals, establishing growth from new markets avoids this! Of course easier said than done
Here with some "global quotes/reports from the financial markets"
...............
"Car Sales in Eastern Europe and South America are outstripping sales worldwide, including China, according to the Global Auto Report released today by Scotia Economics.
According to the report, sales in South America and Eastern Europe grew by 24% in year-over-year results, outpacing China's 17% yearly gain.
Car sales in Russia have soared by 40% in the first half of 2008, totalling 1.45 million automobiles, making it the second largest European market behind Germany, where 1.63 million cars were sold. Car sales in Russia grew by 34% last year to 2.3 million units.
Cars sales in China have slowed as the Chinese government raised fuel prices by 10% in November and 18% in June this year. Vehicle sales grew by 17% year-over-year, a decline from the annual average increase of 30% seen over the decade, China is still predicted to be the worlds largest car market by 2010/2011.
Global car sales increased by 1.5% in the first half of 2008. Record oil prices have undercut sales in the world's mature markets as the U.S., Western Europe and Japan have experienced weakness. U.S. car sales plummeted by close to 30% in year-over-year results, as sales of SUVs and light trucks have slumped.
"Despite the year-over-year sales decline in recent months, we expect full-year 2008 volumes to climb to a seventh consecutive annual record, buoyed by ongoing strength in Brazil, Russia, China and India," said Gomes."
Here with some "global quotes/reports from the financial markets"
..............."Car Sales in Eastern Europe and South America are outstripping sales worldwide, including China, according to the Global Auto Report released today by Scotia Economics.
According to the report, sales in South America and Eastern Europe grew by 24% in year-over-year results, outpacing China's 17% yearly gain.
Car sales in Russia have soared by 40% in the first half of 2008, totalling 1.45 million automobiles, making it the second largest European market behind Germany, where 1.63 million cars were sold. Car sales in Russia grew by 34% last year to 2.3 million units.
Cars sales in China have slowed as the Chinese government raised fuel prices by 10% in November and 18% in June this year. Vehicle sales grew by 17% year-over-year, a decline from the annual average increase of 30% seen over the decade, China is still predicted to be the worlds largest car market by 2010/2011.
Global car sales increased by 1.5% in the first half of 2008. Record oil prices have undercut sales in the world's mature markets as the U.S., Western Europe and Japan have experienced weakness. U.S. car sales plummeted by close to 30% in year-over-year results, as sales of SUVs and light trucks have slumped.
"Despite the year-over-year sales decline in recent months, we expect full-year 2008 volumes to climb to a seventh consecutive annual record, buoyed by ongoing strength in Brazil, Russia, China and India," said Gomes."
Edited by Grant3 on Saturday 6th September 09:53
Murph7355 said:
:J: said:
...
So there is no 'how long will it take', because it is already happening in China......
Do we know how many cars have been sold there, and what the order book looks like?So there is no 'how long will it take', because it is already happening in China......
Giving people freebie rides in them is one thing. Selling a couple of thousand and having the infrastructure to support them properly is another. The car's lasting properly on piss poor roads and fuel is another again.
:J: said:
No idea on the orders, etc, but I can't imagine Aston sending all their guys over there on a whim.
I'm sure the men in Gucci loafers will term it "a customer clinic for potentially huge emerging markets" I wonder if the Chinese, Indians and Russians even aspire to these sorts of car. There are vast cultural differences after all.
Murph7355 said:
:J: said:
No idea on the orders, etc, but I can't imagine Aston sending all their guys over there on a whim.
I'm sure the men in Gucci loafers will term it "a customer clinic for potentially huge emerging markets" I wonder if the Chinese, Indians and Russians even aspire to these sorts of car. There are vast cultural differences after all.
there are already more millionaires in China than the UK ..and they like Astons...last time I was in Shanghai I couldnt beleive how/why their AM/Ferrari/Lambo dealers were so huge and bigger than any over here ...until a chinese friend explained to me that when they get rich over there, they lke to flaunt it
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