In August, Gillian Davis, an automotive analyst for Bloomberg Intelligence, also found Aston Martin on the right track to eventually compete financially with the likes of Ferrari SpA and Porsche. “Only a few brands are capable of selling high-margin $1 million-plus-priced limited-edition supercars, and that club includes Aston Martin,” she wrote.
Michael Dean, the senior European automotive analyst at Bloomberg Intelligence, was more reticent to offer a glowing endorsement, criticizing the less-than-revolutionary technology in the DBX and noting that the company needs to provide more detail and milestones on how it’s going to achieve its new financial targets. But, he said, the addition of Moers and his team is like “night and day” compared to previous management.
“They certainly aren’t out of the woods, and running down inventory and shifting to a demand-driven model was painful,” he said in an email. “They need a total revamp of the sports car range, which will take another couple of years. And in the meantime [that] makes them even more reliant on DBX and limited-edition models.”
Aston’s free cash flow is expected to stay negative in 2021 despite turning positive in the first quarter. But if the company follows its plan, it will be free-cash-flow positive by 2023, Dean said.
Planning for Profitability
That plan involves an expanded product portfolio with at least two incoming mid-engine sports cars—the Valhalla supercar and Vanquish sports car. (These stand apart from Aston’s traditional, front-engined sports cars, such as the DBS, DB11, and Vantage.) There’s also an EV lineup, developed through its partnership with Mercedes, and a multimillion-dollar investment to upgrade the infotainment systems for each of the new models.
Earlier this summer the company unveiled the Moers-ordered revamped production version of its 950-horsepower Valhalla. The plug-in hybrid supercar will go into production in 2023. The price is expected to exceed $700,000.
There will also be more-powerful new engine variants for the most essential part of Aston Martin’s portfolio, the DBX. By the first quarter of 2022, Moers says, Aston Martin will debut DBX engine variants, including a hybrid and a high-performance version that would theoretically compete against the best-selling Lamborghini Urus.
He even insists the Valkyrie will start deliveries by the end of 2021—after two years of delays. “It’s always a journey to change a culture,” Moers says. “We are more open-minded. We have to be a bit more competitive, but we have a chance.”
This article was provided by Bloomberg News.