Thanks to a parade of modern models and marketing tailwinds from Formula One, sports car maker Aston Martin expects positive cash flow this year, according to executive chairman Lawrence Stroll.
“We’re in a really transitional moment right now, a turning point for this company,” Stroll told CNBC. “We are finally launching all our products after designing and building them for the last four years now that I have taken over. Going forward, we will now have normal quarterly production, not the hockey sticks we have seen in the past, but a more time-honored quarterly influx of modern vehicles constantly coming to market.”
Stroll said the company, which has been loss-making for years, expects to be cash flow positive starting in the third quarter and will continue to do so in the fourth quarter and beyond.
It would mark a dramatic turn in the history of the famed British carmaker, famed both for its role in James Bond films and its history of financial ups and downs. Stroll, a former billionaire fashion mogul who took over as Aston Martin’s executive chairman in 2020, has imposed a sweeping plan to restore the brand’s glory and profits.
Aston Martin has overhauled and improved its production, strengthened its finances to invest in the future and is now launching a fleet of modern products featuring high performance and luxury finishes.
Aston Martin F1 team owner Lawrence Stroll (right) shakes hands with Ferrari team principal Frederic Vasseur on the grid before the Miami F1 Grand Prix at the Miami International Autodrome on May 5, 2024 in Miami, Florida.
Chris Graythen | Getty Images
Still, production fell and pre-tax losses doubled in the first quarter from a year earlier, sending the company’s shares to their lowest level since 2022. Stroll said the drop in production and an expected decline in the second quarter are part of an intended phaseout plan older models and make room for the introduction of modern models in the coming months.
“We made a conscious decision to suspend all production” of certain models, he said. “We have reduced wholesale production volumes to prevent older cars from accumulating in dealer networks while our entire brand of modern vehicles is being introduced to the market.”
Up-to-date vehicles include the modern Vantage, a front-engine, rear-wheel-drive sports car with 656 horsepower and a starting price of $191,000.
The automaker also unveiled the modern DBX707, a high-power SUV that accelerates from 0-60 mph in 3.1 seconds and has a top speed of 200 mph. The company also unveiled an open-top version of the DB12, called the DB12 Volante.
Aston Martin has announced a modern, super-powerful V-12 engine, which will be called Vanquish later this year.
Delivery of the $800,000 hybrid supercar called Valhalla is also expected to begin delayed this year or early 2025.
Aston Martin’s $800,000 hybrid Valhalla.
Courtesy: Aston Martin
In addition to modern models, Aston Martin is focusing on further development of its personalization program. A year after opening its “Q Up-to-date York” showroom, which allows customers to personalize their cars with their own paint colors, interior fabrics, stitching and other details, the company plans Q locations in London, Miami and California.
Stroll said some customers pay an extra $100,000 to $200,000 beyond the sticker price on their cars for highly specialized customization. One customer even requested fur on the interior, he said.
The customization program has helped enhance the average selling price of an Aston Martin by 35% over the past two years, to $294,000.
“It really was a home run,” Stroll said. “Not only from a financial point of view. People come [to Q New York] and they understand what Aston Martin is all about. They say, “OK, I understand.” You know, it’s a show, it’s a feeling.”
Aston Martin is also attracting a younger buyer, thanks in enormous part to the Formula One team owned by Stroll. Stroll said the average age of an Aston Martin customer is now 42, up from 55 years ago.
“The brand is really growing and a lot of that has to do with Formula 1,” he said. “Being in Formula 1 for the last three years has really rejuvenated the brand significantly, as well as our entire modern product portfolio.”
Stroll dismissed reports that he wanted to sell a minority stake in the Aston Martin Formula 1 team to assist finance the car company.
“We absolutely do not need to raise capital,” he said. “When you start producing 8,000, 9,000 vehicles [a year], we achieve exceptionally positive cash flow. … So no, there is no interest or need to collect “more”.
As for the future of the company’s electric vehicles, Stroll said the company is delaying the launch of the all-electric Aston Martin from 2025 to 2026. The company has designed four electric vehicles based on the same platform, but Aston Martin customers are not showing enough demand.
“We don’t want to swim against the current,” he said. “Our consumer, or at least the Aston Martin performance customer, is telling us that we are not ready for an electric vehicle, at least not from us. We hear it thunderous and clear.”