Sports car maker Aston Martin expects to achieve positive cash flow this year on the back of a range of new models and a marketing boost from Formula One, executive chairman Lawrence Stroll said.
“We’re in a real transition moment right now, and this company is facing an inflection point,” Stroll told CNBC. “After I took over, after four years of designing and manufacturing, we finally launched all of our products. Looking forward Going forward, we’re now going to have normal quarterly volumes rather than these hockey stick, but more traditional quarterly volumes that we’ve seen in the past with new cars coming to market.
Stroll said the company, which has been losing money for years, expects to turn cash flow positive starting in the third quarter and remain positive in the fourth quarter and beyond.
It would mark a dramatic turnaround for the storied British carmaker, best known for its role in James Bond films and its history of financial ups and downs. Stroll, the billionaire former fashion tycoon, became Aston Martin’s executive chairman in 2020 and launched a sweeping plan to restore the brand’s luster and profits.
Aston Martin has revolutionized and improved manufacturing, shored up its financial position to invest in the future and is now launching a range of new products featuring high performance and luxury finishes.
Aston Martin F1 team boss Lawrence Stroll (right) shakes hands with Ferrari team principal Frederic Vasseur on the grid before the Miami F1 Grand Prix at Miami International Speedway in Florida on May 5, 2024.
Chris Grayson | Getty Images
Still, production fell in the first quarter and pretax losses doubled from a year earlier, sending the company’s shares to their lowest levels since 2022. Phase out older models and make room for the addition of new models in the coming months.
“We have made a conscious decision to cease all production of certain models,” he said. “We have reduced wholesale manufacturing to avoid accumulating old cars in our dealer network while we roll out all new cars.”
New vehicles include the new Vantage, a front-engine, rear-wheel-drive sports car with 656 horsepower and a starting price of $191,000.
The automaker also unveiled the new DBX707, a high-performance SUV that can accelerate from 0 to 60 mph in 3.1 seconds and reach a top speed of 200 mph. The company also launched a convertible version of the DB12 called the DB12 Volante.
Aston Martin has teased a new super-powerful V-12, expected to be called the Vanquish later this year.
The company also expects to begin deliveries of its $800,000 hybrid supercar Valhalla late this year or early 2025.
The $800,000 Aston Martin hybrid Valhalla.
Courtesy: Aston Martin
As well as new models, Aston Martin is betting on continued growth in its personalization programme. Its “Q New York” showroom allows customers to customize their cars with their own paint colors, interior fabrics, stitching and other details.
Stroll said some customers will pay an additional $100,000 to $200,000 on top of the car’s sticker price to receive highly professional, personal service. One customer even asked for fur to be used on the interior, he said.
Over the past two years, customization programs have helped Aston Martin’s average selling price increase by 35%, to $294,000.
“It’s really a home run,” Stroll said. “Not just from a financial perspective. People come to (Q New York) and they understand what Aston Martin is all about. They say, ‘OK, I get it.'” You know, it’s the show, This is what it feels like.
Aston Martin also attracts younger buyers, thanks in large part to the Stroll-owned Formula One team. Stroll said the average age of an Aston Martin customer was now 42, compared with 55 four years ago.
“The brand is really popular, and a lot of it has to do with Formula One,” he said. “Joining Formula 1 over the past three years has really revitalized our brand and all of our new product portfolio.”
Stroll has denied reports that he intends to sell a minority stake in the Aston Martin Formula One team to fund the car company.
“We have absolutely no need to raise money,” he said. “When you start producing 8,000, 9,000 cars (per year), our cash flow becomes very positive…so no, there’s no interest or requirement to raise” more.
Regarding the company’s electric future, Stroll said the company will delay the launch of Aston Martin’s all-electric vehicles from 2025 to 2026. Stonmartin’s customers didn’t show enough demand.
“We don’t want to swim upstream,” he said. “Our consumers, at least Aston Martin customers, performance customers, are telling us we’re not ready for an electric car, at least we’re not ready. So we heard it loud and clear.”
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