Aston Martin chief executive Andy Palmer talks exclusively to Autocar following the announcement that billionaire Lawrence Stroll is investing in the firm this morning.
When did you conclude negotiations?
“I’m getting too old for all-nighters, but let’s just say it was a late night! It has been time-consuming, but as I sit here now the company is better funded than it has ever been in the past, with a good product cadence in plan as per the second century plan and with a commitment to build our own V6 hybrid in the UK. That is compelling.”
We understand you had rival bidders to consider, so why choose Lawrence Stroll?
“Lawrence and his consortium are a group of pretty big names and it is a great sign of confidence in Aston Martin and our plan that they have invested in us. They have huge experience in luxury brands, and as much as anything that gives the company - and me personally - a group of mentors to work with.
“On a more personal level, Lawrence shares a lot of my beliefs and passions. He was clear that the mid-engined plans had to progress, he has a passion for F1, and F1’s ability to sell cars for you, he can see the value of the hybrid V6 and more. And he loves cars; he’s an investor who wants to engage. There would be nothing worse than a disengaged investor.”
Is his investment enough to do what you want?
“To this plan, yes. It allows us to once and for all start doing the right things, chief among them controlling supply and demand in a way that Ferrari has demonstrated can be so effective. In the past we have had a balance sheet that has required us to push wholesales to pay our bills. Now we can reset, reduce our stock and start operating properly.”
Shouldn’t you have done that before?
“We had to pay our bills, most notably the one to build a new factory. We made that decision in 2016 when the going was good and were committed to it. You can’t build a new factory and a new SUV that’s true to your values by cutting corners. The costs were fixed in a bullish market that turned to crap.”
How bad was last year?
“Very. Our retail sales were up 12%, our marketshare was up in a lot of markets, but the slice of the pie was less and the profitability of what we sold not good enough. The list goes on. It was a bad year.”
Don’t you have to take the responsibility for that?
“Yes. I’m chief executive. I’m responsible for that and for where we are. Clearly there were factors I couldn’t control, which affected almost every luxury car maker, but it is absolutely my responsibility to get us through this.”
What would have happened without this investment?
“We would have had to take on more debt at nosebleed levels. $100m at 15% interest is pretty alarming and inevitably would have created problems down the road. It’s not where anyone wants to go, because it is toxic debt, but I’m not going to say that we would have faced doomsday - just issues to overcome down the road. Thankfully we have a solution that I sit here now and reflect on as being enormously positive for now and the long term.”
Why push on with the mid-engine programme?
“Well, I’m a car guy, so that helps, but in business terms the profit margins on those cars are attractive, the market is still growing and open, and there is very little cross-shopping among buyers that would harm our other vehicle sales. Tie those facts into our involvement and belief in F1, plus the arrival as Valkyrie as our halo car, and it makes sense.”