Aston Martin needs to live up to its James Bond spin
In no time to die, the latest James Bond film, the fictional secret agent is ambushed in his Silver Birch Aston Martin DB5. He spins the sports car in a circle, unleashing a hail of hidden machine gun bullets, before driving away. If only Aston Martin itself was so easy to handle.
The automaker this week named its third chief executive in three years, following its disastrous IPO in 2018. It aspires to be Britain’s equivalent of Ferrari, whose classic cars raced against its own in the 1960s, but their paths diverged. Ferrari has an impeccable luxury heritage, while Aston Martin has a patchy, partly glamorous but very flawed history.
Lawrence Stroll, the Canadian billionaire who saved Aston Martin two years ago, sent a signal of his ambitions by appointing Amedeo Felisa, a 76-year-old former Ferrari chief executive, as CEO. He must hope Ferrari’s executives are like Italian cars themselves – the best ones gain in value with age.
Achieving luxury status is not easy. It requires a charismatic story, an expertly crafted product and a sense of mystique: many want to own one, but are frustrated. It’s hard enough with a handbag, but the degree of difficulty is even higher for a sports car with thousands of mechanical parts.
Aston Martins were once wonderful objects. When Aston Martin DB4 GTs took on Ferrari 250 GTOs in road races such as the Targa Florio in Sicily, it was beauty contests as well as sporting events. Ferrari produced just 36 of its 1962 GTOs, and one sold for $48 million in California in 2018, while a 1961 Aston Martin DB4 GT Zagato sold for $13.3 million dollars the same year.
A gadget-packed Aston Martin DB5 first appeared in The golden finger, the 1964 James Bond film. It was one of the most successful product placements ever, although Aston Martin was initially reluctant. The film anchored a treasured association between the automaker and debonair British style.
But British engineering never had the same appeal. Under the hood, Aston Martin has often struggled to match the smooth consistency of Ferrari and Porsche. His cars became known for their mechanical unreliability and rapid depreciation after a few years of ownership. The company went bankrupt seven times and went through different owners, including Ford.
“Ferrari is a story of continuous improvement, while Aston Martin has been a rollercoaster,” says Philippe Houchois, automotive industry analyst at Jefferies. The stock market has judged it harshly since the 2018 IPO: Aston Martin was worth around £1bn this week, while Ferrari was valued at $39bn.
Stroll, an investor in a fashion brand that collects vintage cars including Ferraris, has shown good instincts in trying to restore Aston Martin, despite its turnover. It ceased to act as a mass car manufacturer, rather than the custodian of a luxury brand.
The former often undermine the value of their own cars in the rush to sell as many as possible: by shipping more to dealers than the latter can easily sell, then offering them financing and discounts to get them off the lot. . This in turn lowers resale values and squeezes profits.
It’s a weird way to behave, but it has its own logic: cars are expensive to produce, and manufacturers can save a lot of capital by offloading them to dealers before having to pay suppliers. Breaking the habit and only making the number of cars that drivers will actually buy at full price requires strong nerves and deep pockets.
The luxury brands go further by imposing rarity. It’s only when they offer fewer products than they could sell that a brand’s mystique begins to build. Ferrari makes limited batches of cars that have already been placed with customers; as Aston Martin followed, its resale prices rose.
The British company faces another hurdle: Mercedes-Benz, which acquired a 20% stake in 2020, manufactures most of its engines. A Ferrari is a Ferrari, down to the cylinders and pistons of its engine; Aston Martins have become more reliable but are they really, deeply Aston Martins?
If they were cheaper, few would care, but luxury cars that cost at least £130,000 have to be genuine. It now receives bespoke Mercedes engines, and Stoll this week appointed a former Ferrari executive as technical director, promising to do more in-house as it transitions to electric vehicles.
It’s a long road, and if there’s a lesson from Ferrari, consistency counts for a lot. Aston Martin must move: As inflation rises and downturns loom, the transition to internal combustion engines is also approaching. Ferrari has promised to sell its first all-electric car by 2025, and Aston Martin will try to do the same.
It’s too late? In James Bond films, when the hero is trapped, it’s hard to see how he can escape. It always does, with one exception. But movies have special effects and twists, while fancy cars need to be handled with care. If Aston Martin could spin as fast as it does on screen, life would be much simpler.