The Decline of Aston Martin?
The demand for luxury cars is booming right now but not as it seems for Aston Martin. The DB10 may be the real star of the latest James Bond movie, what Aston needs to really see are dollar signs not stars whizzing around its corporate head. A few days ago the Warwickshire based maker of luxury sports cars announced it is cutting 250 jobs a result of falling sales predominantly in China. In 2007 Aston Martin sold 7,200 cars, last year it could only manage 3,500. Aston was forced to halt sales in China and issued a recall of thousands of cars due to potentially defective accelerator pedals. Not something you want to experience on a 500bhp+ supercar. Doing so hurt the profit margins, not something you want from a small scale independent car maker. The company posted a pre-tax loss of £72 million in 2014, three times more than in 2013. Aston’s main problem is that it is an independent company with big ambitions to expand its current model line up but with very little money to invest in new product development. Under Ford Aston were given a new state of the art production facility and the advanced DB9 chassis. The company really hasn’t moved on from this manufacturing basis since Ford sold off its entire controlling stake in the company in 2007. Aston also had Ford to bail it out, and Ford did. The company is now under the control of a group of high net worth investors and despite the the job cuts investment into new product development is ongoing. Andy Palmer was appointed as new CEO in 2014 and has plans to increase production to 15,000 cars by the end of the decade. It looks like wishful thinking considering sales have declined from that 7,200 peak from 2007. Think about it like this in nearly 10 years sales of Aston Martin’s have nearly halved, yet in 5 years Palmer wants to increase sales to 15,000 units per year. Never going to happen. no way. Maybe just maybe the introduction of the new DBX SUV might well be a step in the right direction, but Aston’s actual R&D spend is minimal, $200 dollars of secured investment isn’t enough these days. Aston Martin isn’t in decline but it has always struggled to make a profit from the beginning and throughout it’s history Aston has managed to create some of the most iconic supercars of them all. That is the Aston Martin way, that is the appeal of Aston Martin.  Decline-of-Aston-Martin
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