The name Aston Martin practically drips
with prestige by many, it is regarded Britain's answer to Ferrari,
luxurious, yet high performing and possessed of a
legendary racing heritage. Some of its cars
are considered icons. The five released in the 1960s is
widely regarded as one of the most beautiful cars ever produced. Aston Martins were, while the Aston Martin
had a lot of success in racing, particularly at Lamonts, they the cars were
always more what we call grand touring cars. You know, they could go
long distances at high speeds, you know, in great comfort, as opposed to,
you know, being a car that you necessarily want to take
to the track. It seems fitting that the brand ended
up becoming the preferred ride of that famous British spy. It has ridden both its mythical fame
and real world reputation into the 21st century and has even in
recent decades been reinvigorated by passionate leaders. But again and again, throughout its
long history, Aston Martin has fallen on some very hard financial times. When Aston Martin Luganda went public
in twenty eighteen shares cost nearly 25 dollars. In May of 2020, they had
fallen to around 50 cents. CEO Andy Palmer left the
company that same month. Aston Martin released its first ever sport
utility vehicle, the X, for the 2021 model year. In doing so, it is following the
lead of luxury carmakers such as Porsche and Lamborghini. But how much can
the BBC's contribute to Aston Martin's bottom line with the coronavirus
and its resulting economic fallout battering the automotive sector? It is a tough time for even
a legendary name to turn itself around. Aston Martin was founded in 1913 in
London, England, by Lionel Martin, a race car driver, and Robert Bamford and
engineer, Martin won a race called the Aston Clinton Hill climb in
a car, the two built together. The victory gave the company its name,
Aston for the race, Martin for the driver. The company made its international
racing debut in 1922 in the French Grand Prix. They then began
breaking world records. Later, Aston Martin won the Biennial
Cup at Lehman, France, in 1932. The industrialist, David Brown bought the
company in 1947, leading to a kind of golden age for Aston Martin. Key thing is, is to recognize really
that David Brown signed the company without his involvement in
nineteen forty seven. The company would have gone bankrupt
again and and it wouldn't have survived into the modern era. So it was brown really that I
think Brown was probably the first person that came into Aston Martin and as
well as having an enthusiasm and he was a huge enthusiast for the cars
and the racing that came later on, what, Aston Martin then? He was also a businessman. During that time, it began rolling out
its famed DB badged cars, grew its reputation in racing and purchased Luganda,
a brand of luxury vehicles. DBE cars began placing races at Lehman
in the early 1950s, but the DEBE five, which debuted in 1963, was
a revolutionary vehicle for Aston Martin. The DB five became
an international icon. To many, it is perhaps best known as
the car James Bond drove in the movie Goldfinger. It was the most popular
film, the biggest blockbuster film ever at that stage, you know. So it was a huge deal. And and so the the Aston Martin DMAE
five, because it was such a sort of integral part of the film. And what was the character in it
suddenly propelled Aston Martin into the spotlight. Really, for the first time,
Aston Martin continued to be a distinctly British icon over
the next three decades. But it also changed owners several
times and repeatedly faced financial troubles. The company acquired its
current full name, Aston Martin Luganda, in 1975 after it was
bought by an international group of investors hailing from Britain, Canada
and the United States. It was acquired by Ford Motor Company in
1987 as part of a push by the Detroit automaker into high end brands
with legendary names such as Jaguar and Land Rover. The Blue Oval sold its stake
in 2007 as it fell on its own hard times, and Aston Martin was scooped
up by a group of investors, including a racing executive named
David Richards and some Kuwaiti investment firms. A few more ownership
changes took place in the next several years. In 2012, an Italian
private equity firm named Invest Industrial bought a thirty seven
point five percent stake. And then Daimler took up a small
stake in the firm shortly after that through a range of various
investors over the years. But none, none that really seemed to
have the long term commitment and the resources to to fund what Aston Martin
needed in order to transform itself throughout many of these years
from 2000 to 2013. The company was headed by CEO Ulrick Bez,
a German who was regarded as a transformative leader. He had been appointed while Ford owned
the company and stayed on even as Aston Martin changed hands. Bez is credited with overseeing much of
the work that led Aston Martin into a new era that drew comparisons
with the David Brown years as an adviser at Ford, Bear's convinced the
automaker to invest in Aston Martin. The company unveiled the Vanquish at
the 2001 Geneva Auto Show. Underbellies Aston Martin designed a vehicle
that did not share any visible parts with Ford cars, helping to
give the impression of a car that was designed to be unique to the brand
from the ground up rather than just a high end Ford
with a legendary nameplate. The vanquished helped get Aston Martin
back into the Bond films appearing in Die another day in 2002 during his
long tenure as chairman and CEO Bez Grue Aston Martin sales from just a
few hundred units a year to thousands. He also oversaw the successful move
of the company's headquarters from Newport Pagnol to a brand new
manufacturing facility engaged in England. He stepped down in 2013 to
take on an ambassadorial role. Then in 2014, the company hired Andy
Palmer, the CEO of Nissan Motor. Like Bez Palmer had engineering chops, he
was trained as one and had started his career as an apprentice
on a car assembly line. He seemed like a perfect
fit for Aston Martin. Palmer had even grown up around Gaiden
England, where the new factory was located. But Palmer's tenure
was marked by troubles. The company undertook an initial public offering
in 2018 at a float price just above 24 dollars. Shares subsequently tanked. This has been a disappointing year
for Aston Martin Luganda Road company chair Penny Hughes in the
automaker's 2019 annual report. Revenue had grown from about 770 nine
point five dollars million in 2015 to a peak of about one point
four dollars billion in 2018. But sales fell to about one
point three dollars billion the following year. After years of growing sales,
the company sold 5000 862 units, a nine percent decline from the 6000
441 it had sold the previous year. The declines in profit and sales
left Aston Martin needing cash. However, at least some analysts say
Palmer inherited a lot of troubles. First of all, going it alone as
a highly specialized, high end automaker is remarkably difficult. The struggles that Aston Martins in right
now and has been for the last year or so, you know, a lot of
that is based on the decisions that were made before Palmer's arrival. And in some in some respects, you
know, Palmer's almost as a scapegoat for the troubles they're
having right now. Most high end brands such as
Porsche, Lamborghini, Rolls-Royce and Bentley are either owned by or supported in
some way by much larger automakers. Aston Martin is something
of an exception. Aston Martin didn't have that advantage of
being sold to a big automaker that could put the money into the brand,
and so in order to develop a range of vehicles, that's very expensive and
that that's also been a drain on Aston Martin's resources. The second problem for Aston Martin is
that while it had many great cars, it had no sport utility vehicle, purist's
bulk at the idea of Porsche, a Lamborghini or even Bentley
and Rolls Royce SUVs. But these models have become
great moneymakers for brands. Porsche was really the first among
these companies to risk controversy by releasing a sport utility in its
case, the first being the Kayan. Now sales of the Porsche Cayenne
and the smaller McCahon outnumber sales of all other vehicles combined. For Aston Martin, they are just
now launching their first SUV almost almost two decades after
Porsche launched the Kayan, even Lamborghini has an SUV now. So that I think that has that
hurt Aston Martin over the last several years. The vehicles they had, while
they're excellent vehicles, they just haven't they're not the vehicles that
most consumers seem to want to drive right now. Aston Martin is, of course, faced with
the added challenge of having to right its ship amid the coronavirus pandemic,
which has dealt a blow to the entire auto industry in 2020,
the Canadian fashion mogul Laurence Strohl led an investor group that took
a significant stake in the carmaker when it delivered results for
the first half of 2020. The company said more than 90 percent
of its global dealership network was open, though it did expect the
pandemic to suppress demand for sports cars. It also expected its production
facility in Gordon, England, to resume business at the end of August,
which is later than it had planned in the first half of 2020. It shuffled its executive team, appointing a
new CEO and a new CFO. Aston Martin has begun to deliver
the SUV, which management says is critical to a successful future. Industry watchers say the company is,
of course, behind nearly everyone else, but they need to get something
going on the electrification side in order to maintain be able to stay
in the marketplace in Europe in particular, where they, you know,
the European regulations on CO2 emissions are getting substantially
stricter this year. One of the challenges for a small
automaker is if they don't have some more efficient, more fuel efficient vehicles
to offer, you know, to offset the the high fuel consumption of cars
like the ones that Aston Martin sells today, it's you know, they
have to they're they're facing some pretty significant fines. And Aston Martin appears to
be cozying up to Mercedes. The newly appointed CEO, Tobias Mor's
previously ran Mercedes AMG, the German automaker's in-house
performance tuning shop. Like Aston Martin, Mercedes also has
a very strong presence in racing. It has been winning Formula One races
in recent years to the chagrin of longtime leader Ferrari. Mercedes is also first and foremost a
luxury brand, and it has some very high end models that rival Aston
Martins in price and features. Some auto industry analysts expect Aston
Martin to strengthen its ties with Mercedes Benz in the future, since
going it alone can be so difficult. It's a global auto market. As competitive as this one is,
you've got constant evolution and constant progress in technology, and it
takes money to keep up. And Aston Martin
is undeniably struggling. People who evaluate the cars I've seen
them, you know, kind of have great they've always had
great looking cars. They've always offered
plenty of performance. But things like user interfaces
inside and technology safety, technology and connected car technology, things that
everyone expects in a modern car they've struggled with. If you're going
to borrow from another company to get some of your electronics and
even some of your drivetrain components, Mercedes Benz is a good source. The company plans to reestablish itself
in the prestigious global Formula One racing series in 2021. Strohl owns the Racing Point F1 team,
which Aston Martin will take over. The automaker has sponsored the Red Bull
F1 racing team in the past, but 2021 will mark its full return as
a manufacturer after an absence of about 60 years. That racing credibility is vital for the
reputation of a company trying to sell high end cars. Aston Martin declined to comment to CNBC
on its present situation or its plans. Technology is changing the auto
market at an incredibly rapid pace. Pricey cars are profitable for makers,
but competition is stiff, and Aston Martin cannot rest on its
illustrious history and pedigree. It needs to keep showing buyers that it
is living up to its storied name.
