Aston will adopt Ferrari’s business model, says CEO Andy Palmer, making fewer but more profitable models.
Aston Martin put new investor and executive chairman Lawrence Stroll front and centre of last month’s revel of the V12 Speedster. We sit down with CEO Andy Palmer to see how Stroll’s expertise (and money) will help revive Aston’s fortunes.
Lawrence Stroll talks about reducing inventories and rebalancing the company. What will the practical effects be?
“Lawrence has been the Canadian Ferrari importer a long time so he understands the Ferrari model very well. We expect in future to make materially fewer sports cars, but to make every one of them solidly profitable. We built 5800 sports cars for wholesale last year. We’ll do fewer in 2020.”
Can you be more specific about numbers?
“Not possible, I’m afraid. There will be a delay while we get stock out of the system. We’ll have to swallow hard. And change what we do. It’s time for us to make good and try to become the British Ferrari, asking customers to spec their cars individually and wait for them to be built. The DBX is already showing how we mean to go on. We’re building those cars only for retail and our order book for 2020 is full.”
What will your relationship with Red Bull be like in future?
“Red Bull’s contribution has been invaluable. Those guys have been great friends to our brand and we’ll continue as their title sponsor in F1 this year. Red Bull Technologies takes responsibility for the Valkyrie and that will continue after we launch it at the back end of the year. Beyond that, we will have a new relationship with the [F1] team currently known as Racing Point. It’s up to us to make proper use of that relationship.”
“Our plans have gone back, but they’re far from dead. We’ve finished the Rapide E engineering, learned a ton of stuff from it and its IP remains with us. But we’ve taken the opportunity to write down the capital expenditure of the electrification work. We’ve had some difficult years. We have to decide what our new priorities are.”
What are your priorities?
“We have to get to the mid-engined model bloodline – Valkyrie this year, Valhalla in 2022 and Vanquish in 2023 – and we have to bring our 3.0-litre V6 hybrid and plug-in powertrains into the whole model range as soon as possible, as a way of staying on the right side of clean air regulations. These powertrains need to be right across our range by the mid-2020s. But we’re not walking away from the Lagonda project. I’d hope that would regain its place in our priority list post-2024.”
The Vantage has had a slow start. Why is this and what can you do about it?
“Actually, we’ve grown our market share with this model. But though our slice got bigger, the cake got smaller. Also, we were missing the Roadster, which will account for about 40% of potential volume. There was a demand for a manual gearbox, which we’re now meeting, and some buyers prefer a more traditional grille, which we’re now providing. And we’re now offering the leasing deals many people want.”
What are your immediate priorities this year?
“We have to balance demand and supply to remove extra stock out of the system and get back to building cars to order. Then we have to ensure that DBX’s quality is perfect from the very first deliveries.”
How do these changes affect your own position as president and CEO?
“That’s a difficult question because you never really know. I’ve got plenty to prove. But Lawrence Stroll is more than interested in cars and he isn’t a passive guy – which I like. He’s made it clear that the CEO’s role won’t change. I’d like to be here to see the DBX and the mid-engined models through their launches, and the Lagonda, too.”
So you’re fundamentally optimistic about the future?
“We had four good years from the back end of 2014, when I arrived, but 2019 was very difficult and we now have plenty to prove. We need a bit of luck with the market, but we’re cutting our cloth to suit the new priorities and conditions. If I wasn’t optimistic, I wouldn’t be the right guy for this job.”