Former Coke boss to chair Aston Martin

[3rtt]

I'm a huge fan of the Aston Martin brand and cherish ownership.

However, as I have posted on here before, I am concercened about the direction the brand is taking.

Today I read that the former Coca-Cola executive is set to chair Aston Martin as the luxury sports car brand heads for a £5bn float.

Not being disrespectful of Penny Hughes, but she hardly has experience of luxury brands. Penny also chairs The Gym Group and IQ Student Accommodation.

Aston Martin hopes to mimic Ferrari which listed in the US in 2015.

The difference between Ferrari and Aston Martin is that Ferrari only produces enough cars for wanting customers. Aston Martin has over produced the DB11 with dealers heavily discounting stock to clear. I can see this is the business model that Aston Martin adopts compared to Ferrari. There are many other difference between the two companies.

I fear that the Aston Martin brand will loose its current brand value and get tolally lost in the stock market bull pit.

[anonymous-user]

A chairman on a board doesn’t usually have a lot of executive involvement in a company. I wouldn’t worry about it.

[avinalarf]

That's all we need .....a former drug dealer as chairman.

[Jon39]

If they do succeed in obtaining a £5 billion stock market valuation, Aston Martin will be in the FTSE 100 group of the most valuable UK companies. Most of you will know, but the FTSE 100 works a little bit like the Premier Division in the world of football. A share price fall (reducing the company market value) can result in relegation (reviewed quarterly).

However, a FTSE 100 company with an entirely male board of directors, is rather frowned upon now.
That criticism has now been slightly dodged, although there are no female executive directors.

[Jon39]

avinalarf said:

That's all we need .....a former drug dealer as chairman.

[Mewsie]

Jon39 said:

However, a FTSE 100 company with an entirely male board of directors, is rather frowned upon now.
That criticism has now been slightly dodged, although there are no female executive directors.

I reckon I could have a bash at it if they need more women. What could go wrong?

[3rtt]

I predict over production of the new V8 Vantage, not enough customers and heavily discounted cars within the next 6 - 9 months.

There are too many players in the luxury SUV market just now. As for houses and submarines ?

[RobDown]

3rtt said:

I predict over production of the new V8 Vantage, not enough customers and heavily discounted cars within the next 6 - 9 months.

There are too many players in the luxury SUV market just now. As for houses and submarines ?

I love all these people saying “there are too many luxury SUV players in the market”. It’s worth thinking about these things before making throwaway comments like that

There’s a reason why Bentley and Rolls Royce have recently entered the market (and Ferrari will likely announce next week their SUV for 2021) - it’s precisely because there are not enough players in that market. Hate to say it but I’d back the management of those companies to know far more about global luxury SUV conditions than random posters on PH

But even putting that to one side. Just think about it - lets say I’ve got a Ferrari/Lambo/Bentley whatever. I’ve got a Range Rover too (we can all have a guess at the percentage of Aston Martin owners who have a Range Rover, but it’s sky high). And I’m in the market to upgrade that to something a bit more exclusive; a £150k luxury SUV. That’s a surprisingly big market. But what are my choices?

Porsche are not a competitor at that level. Sorry they just aren’t. Don’t get me wrong the Macan and Cayenne’s are no doubt great. But they’re the next rung down in terms of luxury and they’re pretty common (it’s all relative but the Macan is by far and away Porsche’s biggest seller).

So you’ve then got Bentley (it’s ugly, let’s all be honest). The Cullinan (I’m not sure, it’s very boxy). Or the new Urus (it will appeal to some). Remember Ferrari don’t hit the market until 2021 at the earliest

You know what? I think the management teams are right - there are too few players in that market. So please tell me why they’re wrong?

[bogie]

The luxury car market is growing exponentially as the economies of India and China grow and ...with the number of millionaires tripling in the last 10 years and will outdo that again the next 10. Literally hundreds of thousands of potential new customers added per year per country.

...all Aston need to do is sell a few percent of these people a car and they will up their own production ten fold.....

[Manx V8V]

Jon39 said:

avinalarf said:

That's all we need .....a former drug dealer as chairman.

That was my first thought when I saw the thread title, I imagined a wealthy former drug baron taking over!!

[AMVSVNick]

RobDown said:

I love all these people saying “there are too many luxury SUV players in the market”. It’s worth thinking about these things before making throwaway comments like that

There’s a reason why Bentley and Rolls Royce have recently entered the market (and Ferrari will likely announce next week their SUV for 2021) - it’s precisely because there are not enough players in that market. Hate to say it but I’d back the management of those companies to know far more about global luxury SUV conditions than random posters on PH

But even putting that to one side. Just think about it - lets say I’ve got a Ferrari/Lambo/Bentley whatever. I’ve got a Range Rover too (we can all have a guess at the percentage of Aston Martin owners who have a Range Rover, but it’s sky high). And I’m in the market to upgrade that to something a bit more exclusive; a £150k luxury SUV. That’s a surprisingly big market. But what are my choices?

Porsche are not a competitor at that level. Sorry they just aren’t. Don’t get me wrong the Macan and Cayenne’s are no doubt great. But they’re the next rung down in terms of luxury and they’re pretty common (it’s all relative but the Macan is by far and away Porsche’s biggest seller).

So you’ve then got Bentley (it’s ugly, let’s all be honest). The Cullinan (I’m not sure, it’s very boxy). Or the new Urus (it will appeal to some). Remember Ferrari don’t hit the market until 2021 at the earliest

You know what? I think the management teams are right - there are too few players in that market. So please tell me why they’re wrong?

Exactly

[john ryan]

I hope she wasn't responsible for bottlng Thames tap water and trying to flog it to the public a few years ago. Daswani?

[anonymous-user]

I dunno. If I had £15k to drop on an SUV to sit alongside my AM/Ferrari/whatever, I'd probably look at the SV Autobiography Range Rover. The original and best, with added luxury and the reassurance of a properly expensive price tag.

[AMVSVNick]

Greg66 said:

I dunno. If I had £150k to drop on an SUV to sit alongside my AM/Ferrari/whatever, I'd probably look at the SV Autobiography Range Rover. The original and best, with added luxury and the reassurance of a properly expensive price tag.

Totally agree. But lots don't.

[3rtt]

RobDown said:

3rtt said:

I predict over production of the new V8 Vantage, not enough customers and heavily discounted cars within the next 6 - 9 months.

There are too many players in the luxury SUV market just now. As for houses and submarines ?

I love all these people saying “there are too many luxury SUV players in the market”. It’s worth thinking about these things before making throwaway comments like that

There’s a reason why Bentley and Rolls Royce have recently entered the market (and Ferrari will likely announce next week their SUV for 2021) - it’s precisely because there are not enough players in that market. Hate to say it but I’d back the management of those companies to know far more about global luxury SUV conditions than random posters on PH

But even putting that to one side. Just think about it - lets say I’ve got a Ferrari/Lambo/Bentley whatever. I’ve got a Range Rover too (we can all have a guess at the percentage of Aston Martin owners who have a Range Rover, but it’s sky high). And I’m in the market to upgrade that to something a bit more exclusive; a £150k luxury SUV. That’s a surprisingly big market. But what are my choices?

Porsche are not a competitor at that level. Sorry they just aren’t. Don’t get me wrong the Macan and Cayenne’s are no doubt great. But they’re the next rung down in terms of luxury and they’re pretty common (it’s all relative but the Macan is by far and away Porsche’s biggest seller).

So you’ve then got Bentley (it’s ugly, let’s all be honest). The Cullinan (I’m not sure, it’s very boxy). Or the new Urus (it will appeal to some). Remember Ferrari don’t hit the market until 2021 at the earliest

You know what? I think the management teams are right - there are too few players in that market. So please tell me why they’re wrong?

Rob, I have to say there was considerable thought applied before posting. As I have with all my posts over the years. Certainly not throwaway comments from my side. Surely, this is what the forum is all about?

I admire the bravery and direction that Aston Martin are taking, however building more cars than customers demand will never match the Ferrari business model.

[Petrus1983]

I'm not meaning to be rude but maybe this is why the British car makers screwed themselves. Penny seems beyond capable of seeing this through with her background -

"She has been a director of the Bodyshop, GAP, Trinity Mirror, Next, Skandinaviska Enskilda Banken, Vodafone and Reuters. She has been a non-executive director with Royal Bank of Scotland Group since January 2010, and a member of the boards remuneration committee.She is a non-executive director of Morrisons, Cable & Wireless and Home Retail Group. She is a trustee of the British Museum and president of the Advertising Association."

These aren't insignificant roles.

[anonymous-user]

3rtt said:

I predict over production of the new V8 Vantage, not enough customers and heavily discounted cars within the next 6 - 9 months.

There are too many players in the luxury SUV market just now. As for houses and submarines ?

I would go with that.

The DB11 is being offered with £15-£20k dealer contributions now, and thats without any face to face negotiation. The DB11 is also now getting listed on the generic car lease websites at competitive rates to the main dealer network, which suggests over supply.

I can see the strategy of selling suvs to RR owning AM owners, but AM will need to nail it to succeed. As their first suv I think that will be a tall order, unless of course they buy all the bits from Mercedes et al and call it an Aston.

[RobDown]

3rtt said:

Rob, I have to say there was considerable thought applied before posting. As I have with all my posts over the years. Certainly not throwaway comments from my side. Surely, this is what the forum is all about?

I admire the bravery and direction that Aston Martin are taking, however building more cars than customers demand will never match the Ferrari business model.

But those are two different, albeit related arguments. There is a danger in oversupply of cars like the DB11, albeit incidentally I think this is why there is an attempt at greater differentiation between the models; to try to capture slightly different market segments. I agree with posters there

But I’m not convinced by the separate argument that the luxury SUV market is already saturated with players (or mature). I don’t think it stands up to scrutiny (albeit AML still need to get the DBX right)

[AMVSVNick]

RobDown said:

(albeit AML still need to get the DBX right)

They have in my opinion

[Jon39]

3rtt said:

Rob, I have to say there was considerable thought applied before posting. As I have with all my posts over the years. Certainly not throwaway comments from my side. Surely, this is what the forum is all about?

I admire the bravery and direction that Aston Martin are taking, however building more cars than customers demand will never match the Ferrari business model.

I agree there are many risks ahead for AML, and these would usually be made very clear in an IPO prospectus.
I purposely do not comment too much about what might or might not happen, because although we all hope everything will go well for the Company, we just don't know what may occur during the next few years.

Creating excitement ahead of an IPO is normal (and obviously good for the sellers), but overdoing the hype can result in a declining share price after a flotation. There is a City expression, which has something to do with leaving a bit on the table for the next person.

I think the biggest risk will possibly be an external factor, such as an economic downturn. In 2007 there was record production (7,281), demand was strong for the two main models, but even the luxury goods / premium automobiles aspect did not help when the financial crisis occurred. Production fell by 47% in just 24 months and costs had to be cut. At that time AML was of course a private company, but as a PLC with quarterly or half yearly reports and a daily moving share price, everything will be very much more public.

Hopefully though, the next economic downturn will not happen for a long time.

Edited by Jon39 on Thursday 13th September 21:20