+++ After decades of ups and downs, British carmaker ASTON MARTIN is charting a more efficient and profitable way forward, leaning on technology from shareholder Mercedes-Benz to make the costly leap to electric vehicles (EVs). Less than 2 years after billionaire Lawrence Stroll drove to the rescue of James Bond’s car brand of choice, Aston Martin has undergone a manufacturing makeover to lift margins and help it become more like rival Ferrari. Stroll, Aston Martin’s largest shareholder and executive chairman, who is also an avid fan of Ferrari, says after vehicle sales jumped 82% in 2021 the carmaker’s transformation to long-term profitability is well under way, with new cars coming and funding secured through 2025. But analysts say Aston Martin, which has gone bust 7 times since it was founded in 1913 and has flirted with death as often as Agent 007, is still burning through piles of cash. Some question its ability to generate Ferrari-like sales to fund the vast cost of electrification. “It’s precarious and it is possible for this company to go bust”, said Redburn equity research analyst Charles Coldicott. “I don’t think it’s a controversial thing to say even though Aston Martin wouldn’t like to hear it”. Asked to comment on perceptions of a shaky future, an Aston Martin spokesman reiterated Stroll’s view that the carmaker is well on the way to long-term profitability and that it has adequate access to cash. On a tour of the carmaker’s Gaydon factory, Tobias Moers, formerly head of Mercedes’ high-performance AMG brand and Aston Martin chief executive since August 2020, rattles off a list of moves including cutting 1 of 2 assembly lines and bringing more bespoke items like seats in-house. Perhaps the biggest shift has been to focus on higher-value customer-driven and customized orders (a big part of Ferrari’s success) rather than over-producing and churning out sports cars wholesale, which then had to be discounted. “When I came in, the company was manufacturing-dominated instead of engineering-led, which for an auto luxury business is insane”, Moers said. “In a company this size, you need maximum flexibility and agility”. Moers has cut Aston Martin’s inventory to 600 sports cars from 2.000 (its cars sell for an average of around €250.000) and customized orders now account for 50% of sales versus 6% when he joined the firm. At that point, the carmaker was in trouble after a disastrous 2018 public listing. Stroll says with its new vehicles the company is targeting a gross profit margin per vehicle of at least 40% and in some cases 50%. Analysts put Ferrari’s figure at over 55%. By 2025, Aston Martin aims to sell 10.000 cars annually (nearly 40% more than in 2021) close to Ferrari’s production. Stroll says Aston Martin will benefit from a deal made with Mercedes-Benz in October 2020 where it gets access to the German carmaker’s latest engines and EV technology. Under that deal, Mercedes now owns almost 12% of Aston Martin, which will increase to 20% in 2023. The German luxury automaker has been relatively tight-lipped about plans for its stake in Aston Martin. “It was really important for a company of this size, particularly with electrification coming, to have a big brother”, Stroll said. “So I did a really transformational deal with Mercedes-Benz in order to get their electric architecture”. Aston Martin plans to launch its first fully electric car in 2025. Carmakers have focused on outsourcing for decades, but increased customization has Aston Martin reversing that trend, said CEO Moers. Allowing customers to select their leather, stitching and other internal flourishes has led to a 20% increase in options, boosting the sales price. But offering 30 different leather qualities and colours means 900 variations. As each car is individual, it is cheaper to do more in-house . For instance, Aston Martin plans to make its own steering wheels again. “Variation at Mercedes-Benz was a nightmare, we wanted to cut it down and cut it down”, Moers said. “But here, this is our purpose. Our sample size is one”. Aston Martin has closed its paint shop at Gaydon and paints most cars at its DBX plant in Wales, saving €1.200 per car by cutting the immense costs of 2 paint shops. But Aston Martin will hand-paint any unique colour customers desire, for an additional cost. Aston Martin has also started delivering the limited edition Valkyrie, a street legal version of a Formula One car announced by the company’s previous management that starts at 2 million pounds. But the Valkyrie has been immensely expensive to develop, so will not be repeated as Aston Martin focuses instead on profitable sports cars. “There is no business case for this”, Moers said. Before going electric, Aston Martin is launching a number of combustion engine models, including its powerful V12 Vantage sports car and a new SUV. In 2023 the carmaker plans its first mid-engine sports car (where the engine sits behind the driver providing better weight distribution for performance) joining Ferrari, McLaren Automotive and Lamborghini. For Aston Martin and its peers, going electric is especially tricky because the appeal of luxury sports cars is based on the feel of a powerful internal combustion engine. “More of the people that are our customers today, who are more petrol heads, want to see, feel, hear and smell a combustion engine for a long time”, Stroll said. But for going electric, “Mercedes will be the base of whatever we do”, he said. Redbush’s Coldicott said Aston Martin lacks Ferrari’s broader appeal and likely cannot sustain the annual production of 10.000 units needed for long-term investments in new vehicles. As the company expects to burn through almost €150 million this year, Coldicott said Aston Martin has limited time. “If you put a gun to my head, I would say my base case is Mercedes will acquire the business”, he said. “I don’t know at what price, but I imagine it will be significantly lower than today’s price”. Mercedes spokesman Tobias Just said in an email the German carmaker is “very happy with our existing cooperation with Aston Martin”. He declined to comment on the German carmaker’s future plans for its Aston Martin stake if the British carmaker’s turnaround stalls. Jefferies analyst Philippe Houchois said while Aston Martin has aspired for many years to be more like Ferrari, its current management has consistently done the right thing, moving its brand upmarket “by underproducing and moving towards more content and more customization.” “They’re now walking the talk at Aston Martin,” Houchois said. “But it’s a question of how long it takes and if they have the financing to back that up”. +++
+++ Electric vehicle pioneer and Tesla competitor Henrik FISKER exited Twitter this week after his old rival Elon Musk reached an agreement to buy the social media platform for $44 billion. Fisker, who oversees electric vehicle maker Fisker Inc., wrote on Instagram Tuesday: “I believe 100% in free speech. But I do not want my free speech to be actively managed or controlled by a competitor. And I do not want a competitor to determine how my followers experience Fisker as we grow our company”. Fisker’s Twitter handle no longer exists, though his company’s Twitter feed remained active as of Tuesday with a post of Henrik Fisker test driving a vehicle. Musk did not appear to directly react to Fisker’s move, tweeting 2 general messages about free speech. Fisker and Musk have long been adversaries. Tesla sued Fisker in 2008 alleging his design company stole Tesla technology and used it to develop his own vehicle. An arbitrator ruled in favor of Fisker. Henrik Fisker did design work on the Tesla Model S sedan before the car launched, when the project was known by the codename WhiteStar. In the early 2010s, Fisker’s first carmaker, Fisker Automotive, was a rival to Tesla and, for a while, they were on nearly equal footing as Fisker promised to bring his attractive sedan called the Karma to market followed up by a string of sleek cars and crossovers. The company, however, had issues with its battery packs and was hit with a string of bad luck, including losing a shipment of vehicles due to fires and floods related to Hurricane Sandy in 2012. It went bankrupt in 2013. The EV landscape has changed dramatically since then, with most major automakers investing heavily in the technology and newcomers like Lucid and Rivian joining the fray. Tesla, meanwhile, took off and catapulted Musk to even greater international fame, along with his PayPal and SpaceX ventures. Henrik Fisker regrouped and founded Fisker Inc. in 2016. It went public in 2020 and is planning to launch the Ocean SUV this year. Before founding EV startups, Fisker was known as a noted sports-car designer who counts the 2005 Aston Martin V8 Vantage and 1999 BMW Z8 among his highlights. +++
+++ GENERAL MOTORS said it earned $2.9 billion in the first quarter, compared with analysts’ estimates of $2.45 billion, and expects full-year net income of $9.6 billion to $11.2 billion. GM reaffirmed its full-year outlook from $13.0 billion to $15.0 billion. Chief executive officer Mary Barra, in a letter to shareholders, said: “Our confidence is strong as we accelerate our transformation, even in the face of a challenging macro environment”. GM said its first-quarter results were driven by “improved production and robust customer demand in North America”. The automaker said on February 1st it could improve wholesale deliveries by 25% to 30% this year, and predicted commodity and logistics costs would rise by $2.5 billion. First-quarter revenue of $36 billion was up 11% from $32.5 billion a year ago. +++
+++ JAGUAR LAND ROVER (JLR) has invited start-up companies from across the United Kingdom to join its new ‘Open Innovation hub’ aimed at integrating the next generation of car technology into its future cars. The car maker says it wants to build new collaborations with start-ups, scale-ups and “like-minded” external firms to develop upgrades in the areas of electrification, connectivity, digital services, the metaverse and more. The hub has been created in partnership with investment firm Plug and Play. Jaguar Land Rover has also created 2 similar set-ups with Brazilian firms Cubo Itau and Firjan, which will provide access to the Latin American start-up sphere. JLR aims to use the hubs to create new jobs and opportunities, with access to a “global ecosystem” of potential partners. This will allow the firm to test new technologies and business models. Activities will be located close to Jaguar Land Rover’s headquarters in Coventry. This latest move from JLR comes as part of its recently announced Reimagine strategy, under which it plans to become “the creator of the world’s most desirable, luxury vehicles for the most discerning of customers”. It will also be looking to hit its target of turning Jaguar into an electric-only brand from 2025 and expanding its EV offering to the Land Rover marque. “By collaborating with innovators and sector experts, the Open Innovation programme will help the business identify digital services, products, tools, and processes for it to achieve its goal of net zero by 2039, while creating new value chains for the business”, the firm said. JLR has already been collaborating with a number of well-known brands, including American software giant Nvidia, which will help to introduce heightened connectivity and advanced autonomous driving functionality to all cars launched from 2025. As well as this, talks are underway with Chinese battery supplier Envision AESC, which could see a new gigafactory created in the UK. The car maker’s strategy and sustainability executive director, François Dossa, said: “With the launch of the Open Innovation platform, Jaguar Land Rover is looking at the entire mobility and sustainability ecosystem to offer an unparalleled customer experience, shaping the future of our industry, and paving the way to the future. We will explore everything from second-life batteries and circular economy to new fintech, insurtech and digital services, all aligned with Jaguar Land Rover as the proud creators of modern luxury”. +++
+++ PORSCHE has previewed the upcoming 911 Sport Classic. In a teaser posted to the firm’s Instagram account with the caption “Shades of the past”, close-up images of a grey Porsche 911 reminiscent of 2009’s special edition can be seen, while a brief glimpse of the car’s front end can be seen in the background. The car appears to feature a large square-shaped air intake across the front bumper, while a smaller intake can be seen across the bottom of the bonnet. Little can be seen of the car, but the special edition appears to be painted in a colour similar to the special Sport Classic Grey featured on the last car. Two lighter grey stripes with dark-blue detailing are shown to be painted across the bonnet. One scene, which depicts the blue detailing being painted, appears to show a rear decklid with a ducktail-stye spoiler under wraps, clearly inspired by the 1973 911 Carrera RS. A reveal date is not disclosed, with the teaser simply telling viewers to “stay tuned”. Just 250 examples of the previous Porsche 911 Sport Classic (based on the 997-generation 911) were produced, all sold within 48 hours of its 2009 unveiling. Underneath the ducktail spolier, Fuchs alloy wheels and double-bubble roof, it made use of an uprated version of the 3.8-litre direct-injection flat six found in the 911 Carrera S of the time, producing 410 hp. Offered only in Sport Classic Grey, the 997 Sport Classic has become one of the most collectable modern Porsche models, with examples now changing hands at over €300.000. The 992-generation Sport Classic is one of a number of new 911 variants due to land in the near future, including a 911 GT3 RS, a 911 hybrid and an off-road 911 Safari. +++
+++ Revived sports car brand TVR has emerged as a shock new sponsor for the Formula E electric race series, as it announces an accelerated EV strategy that will bring a Griffith EV sports car to market in 2024. The Ebbw Vale-based outfit behind TVR’s reinvention (which showed its debut model, the Ford V8-powered Griffith, in 2017) will sponsor the Monaco e-Prix on 30 April and the 2 London e-Prix races on 30 and 31 July. It says its partnership with the race series “marks a turning point in the strategic direction of the iconic British high-performance sports car manufacturer as they accelerate their plans to electrify the brand”. Company chairman Les Edgar said the sponsorships “not only demonstrate our commitment to revolutionising the TVR brand, but to EVs, and becoming a sustainable, net-zero business”. He went on to confirm that the company is progressing with plans to bring EVs to market, following the delayed launch of the combustion-engined Griffith and a now-confirmed pure-electric Griffith variant in 2024. The announcement follows the recent formation of a joint venture between TVR and South American lithium mining firm Ensorcia Metals, which was devised both to fund production of the Griffith and to guarantee a supply of batteries to support future electrified TVR models. Details of these future models remain scarce, but TVR is poised to finally move into its new factory near Cardiff in the coming months, where cars will be built according to the ‘i-Stream’ lean manufacturing process pioneered by designer Gordon Murray. The building is understood to require around 18 months’ worth of fit-out work, but TVR said it will begin producing cars in the meantime. Commenting on TVR’s new partnership with Formula E, the series’ chief commercial officer, Matt Scammell, said: “To see TVR, an iconic manufacturer of performance sports cars, cross over and make this commitment to electric is a significant milestone and aligned to Formula E’s vision of an electric future. TVR is a beloved brand and we look forward to working alongside them in Monaco and London to showcase their plans to electrify”. It has yet to be confirmed whether TVR will give further details of its electrification plans (or even preview new models) at the races. +++
+++ The second-generation VOLKSWAGEN Amarok has been redesigned from the ground up in an engineering programme aimed at giving the popular pick-up truck greater accommodation and load-carrying ability than its 12-year-old predecessor. Set for sale before the end of the year, it has been developed in partnership with Ford and as such shares its chassis, suspension and drivetrains (as well as key elements of its body, interior and electrical architecture) with the new Ford Ranger. Both trucks are based on the T6 ladder-frame chassis a box-section steel structure conceived by Ford but modified with input from Volkswagen, according to Lars Krause, marketing boss of Volkswagen Commercial Vehicles (VWCV). He said: “The new Amarok is a much better pick-up than if Volkswagen had done it alone. The same goes for Ford: without our input, the new Ranger wouldn’t be so good. The partnership has allowed us to pool our individual strengths. Beyond the business side of things, the product has benefited greatly”. With more than 830.000 Amaroks sold to date, Krause revealed that VWCV is expecting big things from the truck, which was developed in Australia, Germany, the US and South Africa. The new Amarok will be offered in single and double- cab bodystyles, together with five trim levels including upmarket Pan-Americana and Aventura, which are described as being off-road and on-road in character respectively. “We’ve significantly modified the design. It’s now much more expressive”, said Albert Kirzinger, head of design at VWCV, revealing that it will offer 2 different front ends, including the X-Design bumper treatment shown in earlier renderings for more highly specified models. The Amarok gets its own uniquely styled bonnet, LED headlights (optionally with matrix properties), front wings and outer door skins. Elements shared with the Ranger include the roof, windscreen, side windows, rear window, wing mirrors and door handles, the latter sourced from the Ford F-150. Along the sides, thereare more pronounced rear wheel arches than previously, while the new-look tailgate has ‘Amarok’ stamped into the metal. As well as growing 100 mm between standard rear-wheel drive and 2 four-wheel drive systems, depending on the engine: one permanent and the other natively rear-driven. The payload has increased to 1.200kg, a towing capacity of up to 3.500kg is now achieved across a wider range of models and the roof-loading capacity is up to 350kg. Its fording limit is also deeper now, in line with the Ranger’s. Although the Ranger will be sold with a petrol-electric plug-in-hybrid drivetrain, this won’t be offered in the Amarok, owing to what one insider called “a less than satisfactory” electric-only range. Engineering studies are, however, under way to give the new pick-up a fully electric drivetrain. The interior is similar to that of the Ranger, but it receives typical Volkswagen touches as part of efforts to make it live up to the comfort and quality expectations of the old Amarok, including its own multi-function steering wheel, seats, switchgear and trims. Ford’s Sync 4 system provides the basis for the touchscreen infotainment. Pricier models, including the Pan-Americana and Aventura, will be available with artificial leather upholstery for the dashboard, door panels and seats, the latter with optional 10-way adjustment. Meanwhile, Ford is ramping up to reveal an electric version of its Tourneo Custom people carrier, the second of four commercial EVs that it will launch by 2024. Arriving on 9 May, the E-Tourneo, as it’s believed to be called, is expected to be closely related to the E-Transit and therefore be fitted with a 68 kWh battery for 320 km of range and a rear-mounted motor making up to 265 hp and 400 Nm. +++
