- Aston Martin wants to be more like Hermes than Ferrari
- Lagonda brand being revived to target Rolls-Royce buyers
Aston Martin Lagonda Ltd. is taking aim at Rolls-Royce as well as luxury brand Hermes as the sports-car maker positions itself for a possible initial public offering.
The British marque is seeking to broaden its appeal with the world’s wealthy by becoming more than a maker of vehicles like the new DB11 sports car. The goal is to generate net profit in three years, which would be the first since 2010.
With a public listing possible in several years, “it’s important for us in the future that we’re seen as a luxury company,” Chief Executive Officer Andy Palmer told journalists Tuesday at the manufacturer’s headquarters in Gaydon, England. “We seek to position ourselves as the automotive equivalent of Hermes, not as the counterpart of Ferrari.”
Aston Martin, which sells about 3,500 vehicles a year, is one of the few global luxury-car brands not part of a larger automotive group. Ferrari will soon join that category after its spinoff from Fiat Chrysler Automobiles NV is completed next month. Stock in the Italian supercar maker, which has a similar luxury strategy, has declined since its October listing.
Both companies rely on sports cars, which have limited appeal in markets like China where wealthy drivers prefer sedans and sport utility vehicles. Aston Martin has boosted its sales team in that country, which this year will account for 200 sales with a similar number expected in 2016, as the British manufacturer looks to improve brand recognition in advance of the introduction of its newest models.
To return to profit, Aston Martin cut 295 jobs this year. With that boost, earnings before interest, taxes, depreciation and amortization are set to rise more than 20 percent in 2016 from 65 million to 70 million pounds ($105 million) this year, the company said.
Even with a luxury shift, autos will remain key, with plans to roll out a new model or variant every eight to nine months, Palmer said. The DB11, which will replace its DB9 flagship model, starts deliveries in September. The DBX crossover will be rolled out by the end of the decade, and the revival of the ultra-luxury Lagonda brand, which is being geared to woo buyers away from Rolls-Royce and Bentley, will follow a few years later. The goal is to survive in an industry where rival groups produce millions of cars a year.
“Whilst creating a fantastic brand, we didn’t actually create a particularly fantastic business” during the company’s 102 years of existence, said Palmer. “We had numerous owners, basically no foresight into the future beyond funding the next vehicle.”
Between the introduction of the DB11, due to be unveiled at the beginning of next year, and the DBX, Aston Martin will also release revamped versions of its Vantage and Vanquish models. The company’s timeline includes five-door and convertible variants of each car.