Currently reading: Aston seals funds for DBX production but issues long-term warning
Aston to put DBX SUV into production and works F1 entry under new chairman Lawrence Stroll - but will need more investment within 12 months
Mark Tisshaw
News
3 mins read
30 March 2020

Aston Martin claims it now has the funding to last at least the next 12 months as part of a new investment into the company that will also result in it entering a works Formula 1 team in 2021

In a series of announcements this evening (30 March), Aston Martin has now formally confirmed that Racing Point F1 team owner Lawrence Stroll will take over as executive chairman on 20 April. A rights issue has raised £536 million and a further £150m will be made available to the company.

That investment will allow Aston to put the DBX SUV into production imminently after the new St Athan facility returns to operation after its Covid-19-enforced shutdown last week, subject to any delays in the production chain. The first customer deliveries are planned this summer, should the supply chain function as anticipated.

The next 12 months is considered significant for Aston, because the DBX is seen as make-or-break for the company's future. Make a success of it and it will become the firm's biggest-selling model with likely the largest profit margins. Failure would put the very future of the company at risk, given the huge investment needed to realise not just the car but also the St Athan factory in which it will be built.

But while confirming the deal, Aston Martin Lagonda Ltd warned in a statement: "Taking into account the proceeds of the capital raise, the Company is of the opinion that the Group does not have sufficient working capital to meet its requirements for 12 months following the publication of the Original Prospectus."

Since the prospectus including details of Stroll's investment was published, the global pandemic has heavily impacted Aston. The firm said the resulting uncertainty raises questions over its future financial position - and makes the success of the DBX even more critical.

The investment from Stroll's so-called Yew Tree consortium stands at a total of £262 million, £171m of which has come today as part of the rights issue. The balance has come from existing company shareholders.

Aston's share price has been in freefall ever since its stock market launch at £19 per share towards the end of 2018. It fell another 18% today to finish at £2.26 per share before this deal was announced. It has tonight said that it would not have the funds to meet the 12 months of investment needed in its previous financial plan announced on 13 March due to the dramatic impact Covid-19 is having on its business.

Stroll, who replaces outgoing chair Penny Hughes, gave little detail on the plans to enter F1 as a works team, but it's expected to be a renaming of his Racing Point squad. Aston's title sponsorship of Red Bull Racing ends this year, although the two remain committed to bringing the co-developed Valkyrie hypercar into production this year.

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"I and my co-investors in the consortium continue to believe passionately in the future of Aston Martin Lagonda," said Stroll. "This is most clearly demonstrated by our investment of £262m which underpins the financial security of the company. This is a very significant capital raise of £536m - due to be made by my consortium and other shareholders at a very challenging time.

"This gives the necessary stability to reset the business for its long-term future. We have a clear plan to make this happen, including Aston Martin entering an F1 works team next season and I look forward to working with the management team to deliver this programme."

Aston CEO Andy Palmer said there were 2000-plus orders for the DBX, as well as strong early demand for the recently announced Vantage Roadster. Beyond those, development would continue on the new V6 hybrid drivetrain as well as the Valhalla and Vanquish mid-engined supercars that Aston is prioritising development of ahead of the Lagonda range of electric cars that had been due to join the DBX at St Athan.

Aston's two production sites at Gaydon and St Athan are currently on shutdown due to Covid-19, and many of its staff are being furloughed where appropriate. It has said it will look at all government help and support on offer in order to protect its future.

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30 March 2020

That's what Aston needs to do to secure its future.

 

DBX has over 2,000 sales? When it was previously annouced that it had 1,800 sales 600 of them were direct to dealers.   Only 1,200 were actual customers placing an order.   That is not a good ratio.

 

Great that Aston has the money to see it through this year ahead, but unless they change design direction and bring in new talent to refresh Marek s designs, to make them desirable to more customers, it will all be folly. If Stroll doesn't as the new chairman see that this is required then don't expect Aston to be healthy this time next year.   Expect them to be once again avoiding collapse.

 

30 March 2020

Like you Symanski I am sceptical about this 'new' beginning for Aston. Given Stroll's wealth and that of his co-investors it's clear they are only dipping their toes with Aston. And to be pinning your whole future on the success of a high end SUV entering the market almost last is surely a recipe for disaster?

30 March 2020
Boris9119 wrote:

And to be pinning your whole future on the success of a high end SUV entering the market almost last is surely a recipe for disaster?

Being last to a market doesn't necessarily mean bad. Apple launched the iPod and they weren't the first with that.   It was, however, a better product and one which lasted far better than others. Even with the iPhone it wasn't the first smart phone either, but it worked better than all which came before.

 

Aston had the first concept of a luxury SUV with Lagonda but now they're last with the DBX.   If the DBX is stunning that won't matter - customers will beat a path to their door.

 

Problem is that the DBX isn't stunning.   Richeman's design, whilst not the worst he's done, isn't stunning.

 

When you're spending that amound of money you expect a powerful car, and it is.  You expect a luxurious interior, but its a bit of a mess.   You want something that wows when you park it up, and it doesn't quite do that.   The engineering is right, the style isn't.

 

Hence why Marek Reichman just go.   And of Stroll and his tippy toe partners don't fundamentally change the designs you can not expect any different an outcome.

 

31 March 2020
Symanski wrote:

Boris9119 wrote:

And to be pinning your whole future on the success of a high end SUV entering the market almost last is surely a recipe for disaster?

Being last to a market doesn't necessarily mean bad. Apple launched the iPod and they weren't the first with that.   It was, however, a better product and one which lasted far better than others. Even with the iPhone it wasn't the first smart phone either, but it worked better than all which came before.

 

Aston had the first concept of a luxury SUV with Lagonda but now they're last with the DBX.   If the DBX is stunning that won't matter - customers will beat a path to their door.

 

Problem is that the DBX isn't stunning.   Richeman's design, whilst not the worst he's done, isn't stunning.

 

When you're spending that amound of money you expect a powerful car, and it is.  You expect a luxurious interior, but its a bit of a mess.   You want something that wows when you park it up, and it doesn't quite do that.   The engineering is right, the style isn't.

 

Hence why Marek Reichman just go.   And of Stroll and his tippy toe partners don't fundamentally change the designs you can not expect any different an outcome.

 

I disagree, I think the DBX is stunning, and its completely bespoke chassis will ensure its one of the very best to drive. It probably has the most spacious interior of any ice SUV too.

31 March 2020

As long as Aston keeps making some of the most desirable looking cars in the world, even if they aren't the very best in terms of function, there's hope for their future.   

30 March 2020

 No, not really, man with serious nwealthh buys neavily to failing company, makes promises, we'll have to wait n see, won't we?

31 March 2020

Stroll and his investors smell a tidy profit I think. Remember BMW 'rescuing' Land Rover and then ditching it having got what it wanted all along?

31 March 2020

There is no electric version, so it will fail before it starts.

31 March 2020
Not sure I agree that their sales decline is because of styling, I don't know why though, but I still think they're great looking cars and they had to change as they seemed to be criticised for having all their cars looking the same as the db7. I'd assume they're not competative and that's why they're not selling as well as they might.
Hopefully the dbx will prove lucrative for them.

31 March 2020

The parallel case is perhaps Maserati which, like AM, relies heavily on GT cars with the odd SUV in the model line-up thrown in to help with the balance sheet.

I wonder how big the 'gentleman's express' market niche is, especially looking ahead to the post-coronavirus economy which I suspect will be very different. Major companies like Mercedes, BMW, VW etc. can easily adjust their focus downwards towards bread and butter models, but single-market-niche companies like AM, Maserati etc. will find themselves difficult to adjust to the new reality.

Even though the external styling of AM models may attract potential customers, their conventional underwhelming interior design is a big turn-off. It approaches Jaguar's level of blandness and BMW's level of awfulness.

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