When Aston Martin prepared for its stock market debut in 2018, it sought to entice investors with scarcity value. There were few publicly listed luxury car makers to invest in, and Aston at least had a chance of replicating the success of Ferrari, which nearly tripled in value in the three years after its 2015 IPO.
Things didn’t work out as advertised. Shares of Aston Martin have fallen nearly 90% since going public in London as the company racked up steep losses and dealers overloaded with inventory.
The company has had a good year restructuring after a bailout by Canadian billionaire Lawrence Stroll, who forged closer ties with Daimler’s Mercedes-Benz to ensure the automaker synonymous with James Bond films survives the pandemic. .
In mid-2020, the fashion mogul and die-hard motorsports fan hired a new CEO in Tobias Moers, who previously ran Daimler’s Mercedes-AMG performance division.
The hope was that the German manager, with his engineering background and track record of reviving the AMG brand, would usher in a new era of efficiency and margin growth and bring the company closer to the demand-driven model perfected by Porsches and Ferraris.
While Moers has made progress in bolstering sales, his job is still proving to be an uphill battle. Aston Martin announced on January 7 that fourth-quarter profits would be hit after delivering less of its £2.4 million ($3.27 million) Valkyrie supercars than expected.
While the company said the limited-edition model program is now on track, Bloomberg reported later in the day that Stroll had approached Steven Armstrong, a former president of Ford of Europe, to gauge his interest in replacing Moers.
The series of events underscores how difficult it is for smaller, less well-capitalized automakers to navigate sweeping technological changes in the industry – from the traditional dealership model to online direct-to-consumer sales, and engines combustion to batteries.
Moers’ plan has been to expand Aston’s lineup with more iterations of the successful DBX SUV, as well as revitalize its sports car lineup. Another limited-edition model, the £700,000 Valhalla, is a plug-in hybrid with 937bhp and a top speed of 350kph (217mph).
The 950-hp plug-in hybrid supercar will be the middle child of the company’s mid-engined sports car lineup, priced below the 2.5 million pound ($3.5 million) Valkyrie and above the Vantage.
Aston Martin aims to offer a hybrid or all-electric option to all its models by around 2025, and purely battery-powered cars will account for half of sales by the end of the decade.
But the switch to batteries will require considerable resources, and it may prove difficult for a manufacturer that finished last year with just £420 million in cash.
This will help Aston secure support from Moers’ former employer in years to come. After buying AMG engines for years,
Aston is now also getting hybrid and electric powertrains from Mercedes in exchange for shares, an arrangement that could increase Mercedes’ stake in the British company by up to 20%.
Aston is a far cry from the dire straits Stroll rescued it from at the start of 2020. But if Valkyrie’s problems persist and management turmoil persists, one has to wonder if Mercedes will be chosen as the brand’s next savior. Jump.
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