Aston Martin’s strategy for its stock market debut in 2018 was to attract investors with the scarcity value of its brand. Very few luxury car companies were traded publicly, and Aston had a good chance to replicate the success of another luxury carmaker, Ferrari, whose IPO in2015 saw its stock value triple in three years.
The shares of Aston did not perform as advertised and slid almost 90% since its IPO in London. The company piled up major losses, and dealers were stuck with huge inventory. The company spent a year restructuring itself after it was helped by Lawrence Stroll, a Canadian Billionaire who forged close ties with Mercedes- Benz to ensure that the car synonymous with James Bond survived the coronavirus pandemic.
Stroll, a die-hard motorsports fan and fashion Moghul hired a new CEO, Tobias Moers, in mid-2020. Tobias had previously headed the performance division of Daimler’s Mercedes-AMG. The expectation was that the German Manager, who had an engineering background had a track record of turning around things in the AMG brand, would bring in demand-driven models for Aston similar to the likes of Ferrari and Porsche.
Though Moers bolstered sales, it was still an uphill task. As per Bloomberg News, AstonMartin on January 7 announced that its final quarter earnings would be affected as there were fewer deliveries of its $3.27 million Valkyrie supercars than projected. The company has informed that the limited-edition car model program is back on track; still, as per reports, Stroll has approached a Senior Executive from Ford to replace Moers.
The unfolding of a series of events highlights how difficult it is for small car makers who are less capitalized to navigate the automotive industry, which faces sweeping technology changes- from combustion engines to batteries, traditional dealership models to direct consumer sales online.
Moer planned to expand the successful DBX sport utility car with more variations and also rejuvenate the sports car lineup. Another model is the hybrid £700,000 Valhalla with 937 horsepower and 217 miles per hour top speed. Aston aims to offer a fully electric or hybrid of all its existing models by 2025, with fully battery-powered cars accounting for half its sales by the end of the 2020s.
Aston ended last year with just £420 million of cash in hand, which is not enough as shifting to batteries will require huge resources. Daimler, former employers of Moer, can assist Aston as they have been buying AMG engines for years and getting the electric and hybrid powertrains from them in return for allowing German company Mercedes to take up equity stake much as 20% in the British company.
Aston is not yet over the dire straits it was in when Stroll rescued them in 2020. However, if the Valkyrie issue persists and turmoil in management continues, the question remains whether Mercedes will be the next savior of the James Bond Brand.
