Lawrence Stroll’s strategy for ensuring Aston Martin’s future prosperity and preventing it from going bankrupt for the eighth time is to focus on personalising vehicles for customers and growing sales volume.
The automaker’s new executive chairman has a strategy to make the British sports car manufacturer more like Ferrari in the near future, and to rely on its majority shareholder, Mercedes, to help it traverse the difficult transition to an electric future.
Tobias Moers, the former CEO of Mercedes-AMG, has been tasked with enhancing profitability at the firm. Surprisingly, at a firm of this scale, this means more customization.
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“When I came in, the firm was dominated by manufacturing rather than engineering, which is absurd for a car luxury business,” Moers told Reuters. “You need full flexibility and agility at a firm this size.”
Since Moers joined Aston Martin in 2020, the percentage of special orders has increased from 6% to 50% of total sales. Although this still falls short of Ferrari’s rate of customisation, which analysts estimate to be closer to 55 percent, it is a huge step forward for the British sports car manufacturer. It wants to create its own chairs and steering wheels to make things like personalised stitching more cost-effective, which seems illogical.
“Variation was a problem for Mercedes-Benz; we wanted to reduce it down and cut it down,” Moers explained. “However, this is our goal here.”
Despite the fact that custom is king at Aston Martin, large projects like the Valkyrie, which necessitate costly technical efforts, will not be undertaken again. Instead, it will concentrate on more profitable sports vehicles, with the goal of matching Ferrari’s 10,000-unit-per-year production rate by 2025 in order to keep developing new models viable.
It will have to rely on its stakeholder Mercedes-Benz to make the move to electric performance viable. When it comes to manufacturing electric vehicles, Stroll said the German business “will be the foundation of anything we do.”
However, having a strategy does not always entice investors. Aston Martin has been burning through cash as part of its transformation, and producing 10,000 vehicles per year will be difficult.
“It’s fragile, and this firm might go bankrupt,” said Charles Coldicott, an equities research analyst at Redburn. “If you put a pistol to my head, I’d say my best case scenario is Mercedes buying the company.”
Despite the sceptics, Aston Martin is certain that it can develop a sustainable business model for a more sustainable future.
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source: carscoops
