With a parade of new models and the marketing tailwinds of Formula 1, sports car maker Aston Martin expects to achieve positive cash flow this year, according to executive chairman Lawrence Stroll.
“We are now at a real transitional moment, with an inflection point for this company,” Stroll told CNBC. “We are finally introducing all our products, after designing and building them for the past four years, after I took over. In the future, we will now have normal quarterly production, not these hockey sticks we have seen in the past, but the more traditional quarterly flow of new vehicles continually entering the market.”
Stroll said the company, which has been losing money for years, expects to have positive cash flow starting in the third quarter and to remain positive in the fourth quarter and beyond.
That would mark a dramatic turnaround for the legendary British carmaker, famous for its role in the James Bond films and for its history of financial ups and downs. Stroll, a former billionaire fashion mogul who took over as executive chairman of Aston Martin in 2020, imposed a sweeping plan to restore the brand's luster and profits.
Aston Martin has overhauled and improved production, strengthened its finances to invest in the future, and is now launching a fleet of new products characterized by high-quality and luxurious finishes.
Aston Martin F1 Team owner Lawrence Stroll (R) shakes hands with Ferrari team principal Frederic Vasseur on the grid ahead of the F1 Grand Prix of Miami at 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 compared to the previous year, sending the company's shares to their lowest level since 2022. Stroll said the production drop, as well as an expected drop in the second quarter, is part of a deliberate plan to phase out older models and make room for the range of new models that will be expanded in the coming months.
“We have made a conscious decision to stop all production of certain models,” he said. “We have reduced the wholesale volume of production to avoid older cars entering dealer networks as we launch all our brand new cars.”
The 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 carmaker also unveiled the new DBX707, its high-performance SUV, which can go from 0 to 100 km/h in 3.1 seconds and reaches a top speed of 320 km/h, as well as an open-top version of its DB12, the DB12 Volante .
Aston Martin has teased a new super-powerful V-12, expected to be called Vanquish later this year.
It is also expected to start delivering its $800,000 hybrid supercar called the Valhalla late this year or early 2025.
The $800,000 Aston Martin hybrid Valhalla.
Courtesy: Aston Martin
Along with new models, Aston Martin is committed to continued growth through its personalization program. A year after the opening of the 'Q New York' showroom, where customers can personalize their car 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 are paying $100,000 to $200,000 extra on top of their car's sticker price for highly specialized personalizations. One customer even requested fur in the interior, he said.
The customization program has helped the average sales price of an Aston Martin increase by 35% over the past two years to $294,000.
“It was really a home run,” Stroll said. “Not just from a financial point of view. People are coming in [to Q New York] and they understand what Aston Martin stands for. They say, 'Okay, I understand.' You know, it's the show, it's the feeling.”
Aston Martin is also attracting a younger buyer, largely thanks to the Formula 1 team, which Stroll owns. Stroll said the average age of an Aston Martin customer is now 42, compared to 55 four years ago.
“The brand is really on fire, and a lot of it has to do with Formula 1,” he said. “Being in Formula 1 for the last three years has significantly rejuvenated the brand, and so has our entire new product portfolio.”
Stroll has dismissed reports that he is looking to sell a minority stake in the Aston Martin Formula 1 team to help finance the car company.
“We absolutely don't need to raise capital,” he said. 'If you're going to make 8,000, 9,000 vehicles [a year], we become extremely cash flow positive. …So no, there is no interest or requirement to raise 'more'.
On the company's future of electric vehicles, Stroll said the company is delaying the launch of a fully 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 upstream,” he said. “Our consumer, at least the Aston Martin customer, the high-performance customer, tells us that we are not ready for an electric vehicle yet, at least not from us. So we hear that loud and clear.”
