Here's a tricky thing: Aston Martin is one of the most respected names in the automotive business and one of the coolest brands in the history of Great Britain. Even with that said, of the last 103 years of the company's history, it has been an underperformer for, well, 103 years. Losing money and lagging behind competitors, Aston Martin could never exploit its full potential. But the company has brought in a special agent to change this state of things. His name's Palmer—Andy Palmer. The resolute Brit spent most of his 53 years climbing up the corporate ladder to become one of the key strategists in Nissan, but the challenge he took up in the fall of 2014 may be even greater than co-managing one of the biggest car companies in the world. He's at Aston Martin to do what no one has done before: making this company strong.
Andy describes why all of the previous managements just couldn't cut it: "Over the years, the brand has had multiple owners who treated it as an ego purchase. They made investments in one car, made that one car. It did very well but had nothing to follow it. The brand lived a sinuous curve and at the time more new product was needed; it was simply not generating enough revenue to invest in new cars. In this industry, to be successful, it's all about the tempo, constantly upgrading your product. That's the state we need to get to."
Even before his second work anniversary in Gaydon, he's already made significant steps to fulfill his promise. "Where we are now—I think is the end of the beginning. The plan has been running for about 18 months and essentially it is broken up into three major phases until 2021. We call it: The Second Century Plan."
"The first phase and the one that we've been fighting through the last several months is a kind of a bridge. Obviously, we didn't have a new platform, but we've been very much concentrating on improving the balance sheet and preparing for the new cars. Through the last 18 months we've put much emphasis on the special products. GT12: 100 units, $330,000 each, sold out. Interestingly, one unit has just gone on sale on a secondhand market for roughly $580,000—so you can see, there's a lot of desire for that product. GT12 was followed by the Vulcan. It was 24 units, $2.4 million, sold out. This year we start with GT8, 150 units, at about $200,000—sold out before we even announced the product. Just a week ago, we announced Vanquish Zagato: 99 units, $660,000—sold out. We have another special coming out shortly and it's already sold out, and I didn't even announce it to anybody. In my understanding it's still secret, but I have over 90 deposits for a car that doesn't exist."
"So some things have changed, because we as a company were not able to generate that kind of tempo when we did special projects in the past. We intend to keep building special versions annually, because those are really the next DB5s and DB6s, when you think about the numbers of those cars that were made. Our balance sheet saw a good level of improvement at an operational level, but obviously on the bottom line level, we're still losing money because of the heavy investments that we're making in new product development.
"Basically, we call it the Second Century Plan, but internally we call it a 'Sh*t or Bust' plan, because it's about really investing and doing something the brand has never done before. In the last 18 months, we've been expanding and preparing the sales network, particularly investing in the Far East, Russia, China, and some key places around Europe and the U.S. We now have a sales network of about 160 dealers and we think it's eminently capable of selling at least 7,000 sports cars a year."
So which cars would that be? "For me, DB11 is the most important car in Aston Martin's 103-year history. A DB is an important constituent of our company and we come at this one with a brand-new platform, brand-new engines, and a brand-new body. By itself, it doesn't make it the most important, but this platform and those engines are then used across the rest of the sports car range, which makes it very important. You could argue the same when talking about the DB9, but we've made the decision to use what we think is our most innovative contribution to the automotive society, a bonded aluminum structure mixed with extensive use of carbon fiber. We've decided to use that method of architecture for the DBX, our crossover. That transports the company to a different place, because it gives us a wider portfolio and protects us from ebbs and flows of the global economy, but also finds itself winding through to when we ultimately launch the Lagonda range of cars, which will also be built around a bonded aluminum chassis. From that perspective, when you see how that potentially changes the phase of the company, that's why DB11 is the most important car this company has ever produced."
This leads Andy to opening up about the future model plan. "DB11 will be followed by Vantage and Vanquish replacements; our core car lineup will be complete by 2018. That allows us to move to the third phase of the plan, which is the portfolio expansion. It includes DBX, which we're already more than one year into in terms of design. We've fixed the proportions and the styling of that model and, of course, we bought a new factory in Wales in which to build it.
"At this point, we should touch on where we see volumes going. Gaydon is limited to 7,000 units per year, can't go further than that. One of the reasons for choosing Wales was it takes away the temptation to build more sports cars. In other words, if we would have expanded Gaydon, there was the possibility that we could've decided to build 8,000 or 9,000 sports cars, and we don't think it's the right thing to do. We want, very much, to stay in that luxury segment and not get tempted to go down into the premium segment. Gaydon will be our centerfold of sports car production, mechanically capped at 7,000 units per year. We've copy-pasted that facility into Wales, giving us a total capacity of 14,000 units. We don't necessarily plan to use all of that, but that gives us DBX and then headroom for the production of Lagonda—or Lagondas."
So a wholly new lineup for 2018 and a brand-new brand emerging along Aston Martin— and there's more: "One other departure is our electric car. It's Rapide based and it'll come in 2018. It plays two roles. One, a defensive role: We made a decision to continue to build a V-12 engine. That puts us in a tight spot from an emissions point of view in Europe. Naturally, the industry is taking us from V-12s to V-8s, to V-6s to I-4s and I-3s, and I never want to be the CEO that puts an I-4 into an Aston Martin. We decided to keep the V-12 as our beating heart, so the engine that propels DB11 is an Aston Martin V-12. We did that because we were able to buy the AMG V-8 for the future, so we invested in developing a V-12. In order to allow that to happen, we needed the carbon offset, and therefore we need a zero-emission vehicle. From an assertive point of view, however, I happen to think that since Tesla exists in a premium segment and it's coming down, nobody's really up in that luxury segment and I think there's a place in there for a purely electric vehicle. I imagine the movie stars in Hollywood exerting their right for a luxury car, but a zero-emission one. I believe we can cover the luxury car market with seven cars, each with a seven-year life, one car launched every year, and then it's a copy-repeat job. If we do that, we're constantly generating enough cash that we can invest in the next models, and we never find ourselves in the situation where we run out of cash and are not able to invest in a new model."
In Andy's own words, "It's not rocket science," but it's easy to imagine the challenges ahead of him. Yet there are still some obstacles no one expected—or nearly no one. "Rather strangely, we prepared for Brexit. One of the things we assumed would happen with Brexit was that the pound would weaken. What we still don't know is what will happen to the U.K. market, what will happen to the European market, what the negative effects will be. For us, a weaker pound helps improve our profitability; we're an 80 percent exporter. What we've done is decided to invest that windfall into the communication of 'for the love of beautiful.'"
At this point, investing money in a pompous slogan with so many other expenses going on may seem out of place, but in fact Palmer is onto something here. "One of the things that I found surprising when joining the company was recognition and understanding of Aston Martin. If you go around the world and ask a customer about the aided awareness of Aston Martin, you have something like 98 or 99 percent 'I know whom Aston Martin is.' Of course, a lot of that is run on the back of James Bond, but when you get deeper about understanding what we do and what makes us stand out versus Bentley or Rolls-Royce is less clear."
"The analogy that I like to make is to cricket. If you were brought up in United Kingdom, you kinda grew up with cricket. No one ever teaches you rules; you just know it, because you played it in the street, and it all just makes sense. If you go across to the United States, or maybe even Denmark, and you ask somebody, 'Do you know cricket?' the answer will be 'Yes'—'Do you understand cricket?'—'No way.' And sometimes Aston Martin is a little bit like cricket. Do people recognize our cars are handbuilt? Do they recognize there's only one robot in the factory? Do they recognize we're an entirely independent British car company? Do they recognize our badges are made in the Jewelry Quarter in Birmingham? Do they recognize we make the only manual transmission V-12 cars on the market? We've got to find an educating platform allowing that educational process. Let's call it teaching the Americans to play the cricket."
For Andy, it's personal. "I'll work till my dying breath to make sure we succeed because that's the calling. I feel it's necessary. It's kind of a disgrace; when I joined the car industry in 1979 as a 16-year-old apprentice, British Leyland was one of the biggest car companies in the world. What's left now is Aston Martin, and I just feel we need to try and inject some pride in the British car industry."