BUSINESS Bloomberg Businessweek November 18, 201920
CAR: COURTESYASTONMARTIN.DATA:COMPILEDBYBLOOMBERG○ AstonMartin,onceJamesBond’sfavored
ride,hasskiddedsincegoingpubliclastyearWhy 007 MayNeed
AnSUV
A yearagoit lookedlikeinvestorsandsupercarfans
who’dmissedoutonFerrariNV’sblockbusterinitial
publicofferingin 2015 mightgeta secondchance
withAstonMartinLagondaGlobalHoldingsPlc.
TherewastherichBritishmotoringheritage,aggres-
siveperformance,andAston’smoviestarallureas
JamesBond’svehicleofchoice.Sowhatcouldpos-
siblygowrong?Turnsout,prettymucheverything.
Once-covetedVantage,DBS,andDB11Volante
carsarepilingupatdealerships.Astonshareshave
lostmorethanthree-fourthsoftheirvaluesincethe
IPO—theworstperformanceamongtheU.K.’s 350
biggestcompaniesthisyear—andmanagementhas
beenforcedtoraisemorefundstostabilizethebusi-
ness.“We’renothappywiththewaytheyearhas
gone,”saysChiefExecutiveOfficerAndyPalmer.
NowallhopestopullAstonoutofitsrutreston
a newmodel:theDBX,a sportutilityvehiclethat
willgoonsaleinDecember.Witha startingprice
of$189,900,it joinsa crowdedfieldofhigh-end
SUVsthatincludesthepricierLamborghiniUrus,
cheaperBentleyBentayga,andthe$325,000-plus
Rolls-RoyceCullinan.WiththeDBX,AstonMartin
aimstoliftannualproductionto14,000vehiclesby
2023,morethandoublelastyear’soutput.
EvenbeforethefirstDBXrollsoffthelineata
newfactoryinSt.Athan,Wales,there’simmense
pressuretohitspecificsalestargets.Astonsigned
a $100millionloaninSeptemberthat’sconditional
onit winningordersfor1,400DBXsbymid-2020.
Fortheluxurycarindustry,SUVshavebecome
big money-spinners. Porsche AG started the trendTHEBOTTOMLINE AstonMartinhaslostthree-fourthsofits
market value in the past year. It’s betting that a pricey SUV will get
its business back on track.THE BOTTOM LINE Nigeria accounts for more than 150,000 metric
tons of plastic bottles annually, half of it from the megacity of Lagos.
The government is moving to allow recycled bottle use.earnings for collectors and dumpsite scavengers.
“It’s the chicken or the egg—which ones comes first?”
he says. “You have to create the demands for the col-
lection volumes to show up. If investors wait for the
volume to increase, where is it going to go?” he asks.
“You can’t invest in collection without a major driver
for the offtake.” —Yinka Ibukunwith the Cayenne more than a decade ago, and today
established players such as BMW AG rely on them
for almost half of sales. Even racing-bred Ferrari will
join the club with its Purosangue in 2022. SUVs are
especially popular in markets such as China and
Russia, where two-seat sports cars aren’t as attrac-
tive for well-heeled buyers who are chauffeured
around congested streets. Women are also a big tar-
get group for SUVs, and Aston, which says only 4%
of the 85,000 cars sold in its 106-year history went
to females, could use help attracting them.
This month, Aston said its delivery goals for the
year will fall below its previous guidance of as many
as 6,500 cars, already lower than the 7,300 it had
predicted at the start of the year. It also said the
average selling price for its core models had fallen
to £136,000 ($175,000) from about £140,000. Says
Jefferies analyst Philippe Houchois: “Aston Martin
sold the story of performance and growth and a
kind of appeal, which they haven’t delivered.”
Palmer, who spent more than two decades with
Nissan Motor Co., joined Aston Martin in 2014.
Besides rejuvenating the model lineup and bring-
ing back James Bond as an ambassador (007 had
briefly wandered off to BMW), he sought to branch
out into a lifestyle offering that ranges from leather
key rings to a minisubmarine called Project Neptune.
In the pantheon of supercars, Aston occu-
pies a difficult-to-define spot. It doesn’t have the
name recognition of Ferrari. It’s a quirkier choice
than Porsche, but it’s more mass-market than
ultraniche players such as Zonda or Sweden’s
Koenigsegg. And, unlike Volkswagen AG’s Bentley
and Lamborghini and BMW’s Rolls-Royce, Aston
doesn’t have the benefit of a deep-pocketed par-
ent company, instead relying on Mercedes-Benz AG
to supply its engines. “Aston is being managed as
a premium/mass-market rather than a luxury car-
maker,” says Giulio Pescatore, an analyst at HSBC.
Still, he says, the new SUV may hold enough prom-
ise that, “after months of underperformance and
the future of the company at stake, we believe the
launch of the DBX is potentially game-changing.”
Palmer also hopes to get a boost from the next
movie in the Bond franchise, where Aston Martin
has been the mainstay ride since 1964, when the fic-
tional British superspy got his first DB5 in Goldfinger.
An Aston starred in 11 Bond films after that, with
the latest scheduled to feature the DB5 as well as
the Valhalla. The title of the next movie, due out in
April, no doubt captures Palmer’s hope for the ven-
erable car brand: No Time to Die. —Siddharth Philip○ Changein shareprice
sinceNov.9, 2018
AstonMartin
Ferrari11/9/18 11/8/1960%30 %0 %-30%-60%○ A prerelease Aston
Martin DBX covered in
camouflage