Aston Martin Will Invest $845M in New Hand-Made Models
Via The Detroit News
Aston Martin Lagonda Ltd. is overhauling the technology that will underly its hand-made vehicles for the next 15 years as the maker of sports cars featured in James Bond films defends its independence.
While lacking the resources of larger rivals, “a buck travels farther with us,” Chief Financial Officer Hanno Kirner said at an event at Milbrook Proving Ground, about 50 miles north of London. “As of today, we are fully funded on our way to sustainable profitability.”
The company’s models, which are assembled by hand and therefore don’t require costly production equipment, sold for an average 126,000 pounds ($213,000) last year, up from 70,000 pounds in 2007, Kirner said. Because of the lower overhead, Aston Martin can introduce cars as much as 40 percent less expensively than competitors, he said.
Aston Martin, a rare ultra-luxury car brand that doesn’t belong to a larger manufacturing group, plans to spend 500 million pounds ($845 million) by 2017 to develop new models. While that’s the biggest investment program in the marque’s 101-year history, it pales in comparison to the firepower at the disposal of rivals, which can spend more money in as little as three months.
Small manufacturers “will have the biggest problems to survive independently, because they can’t afford innovations for the future,” Thomas Weber, development chief at Aston Martin’s investment partner Daimler AG, said. “Innovations require a lot of money and know-how.”
Keeping that edge is a challenge for Aston Martin as it vies for buyers of elite cars with the likes of Volkswagen AG’s Porsche and Bentley, Fiat SpA’s Maserati and Tata Motors Ltd.’s Jaguar.
Aston Martin cars require as long as 200 hours to make by hand, with each vehicle bearing the name of the final technician who worked it before it’s cleared for delivery. Of the 70,000 cars built in the manufacturer’s history, about 85 percent are still running. Models developed under the investment program would start coming out in 2016.
“They’ve been stretching the technology they have as far as possible,” said Al Bedwell, an analyst at LMC Automotive research company in Oxford, England. “They keep pushing variations of the same theme, but the theme has to move on. They risk being massively left behind.”
The lack of resources led Aston Martin to team up with Daimler’s Mercedes-Benz, which will be granted a holding of as much as 5 percent in the U.K. company as part of a cooperation agreement. The linkup includes Mercedes’s AMG performance unit supplying V8 engines for new Aston Martin models.
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