Aston Martin, which wasn’t doing great before the coronavirus pandemic, really isn’t doing great amidst it. Meanwhile, its incredibly rich new dad is sure that this will definitely be its year.
The company recently got a cash infusion from Canadian billionaire Lawrence Stroll, who also became executive chairman, but the timing of that move is looking worse and worse the longer the pandemic rages. On Wednesday, the company said it lost around $145 million in the first quarter of 2020, but more alarmingly sold just half the cars it did in that time frame compared to last year.
And the cars it did sell sold for less money on average, according to The Financial Times.
Last year the company disclosed it had too many unsold cars sitting at dealerships, leading to a stinging profits warning. Since then the group has been reducing stock levels to try to rebalance supply and demand.
The average selling price last quarter, excluding dealer costs and tax, fell to £98,000, compared with £149,000 in the same period a year earlier.
“Too many unsold cars” is FT’s nice way of saying that not a lot of people want to buy a new Aston these days; it sold just 578 cars in the first three months of 2020, or a little less than half of what it did last year. Stroll, for his part, gave this quote in an official company press release with the same authority as a dad who just bought his third riding mower in as many years. Emphasis mine:
While in the short-term, as anticipated, we will have some difficulties due to the onset of COVID-19, having been in the business for a few weeks now I am even more enthusiastic and confident in the multi-year plan that we have set out to bring new and exciting products to market to drive demand and build the Aston Martin brand.
Stroll and Aston are largely betting on the DBX, of course, which they still say is on track for deliveries this summer, and for which they claim orders are strong, even into 2021. But Aston still has to cross the finish line with it. In the meantime, Aston has a new plan for the rest of its cars.
From the FT:
Its main facility at Gaydon, Warwickshire, has not yet restarted production, though some staff are working on its Valkyrie supercar.
“We have this policy of destocking [the dealers] so the urgency [to restart] is not as great,” Mr Palmer said.
Once it had bled the dealer stocks, the company aimed only to make cars that were ordered by customers, he said, something that would take the company closer to Ferrari, which it hoped to emulate.
Ferrari is hugely profitable, so a strategy of simply being more like it isn’t the worst path for Aston, but you have to wonder when time will simply run out.