Aston Martin - Opportunities and Threats Under New Ownership
The big news this week for Aston Martin fans is that the luxury sports car maker made famous by James Bond 007 is heading back into British hands.
Ford announced that they have sold the company to a UK-led group fronted by Dave Richards - boss of respected motorsport specialist Prodrive - for £479 million.
The American car giant has had a big stake in Aston Martin since 1987, buying the company outright in 1994 and overseeing a period of unprecedented sales success. Under Ford's ownership, the company developed a number of respected new models and reported record sales of 7,000 cars in 2006.
But with the onset of Ford's financial troubles, the group decided to sell the luxury marque. Ford lost more than $12bn in 2006, and faces huge restructuring costs. However the group has still held on to a £40 million slice of the company.
The sportscar specialist will remain at its purpose-built factory in Gaydon (Warwickshire), where 1,800 people are employed.
Prodrive success
Under the leadership of Dave Richards, Prodrive has built a formidable reputation in motorsport, running the Aston Martin racing team in the sports car series around the world as well as the highly-successful Subaru rally team.
Dave Richards also managed the BAR Formula One team from 2002 to 2004, taking the team from eighth to second in the manufacturers world championship in that period, before Honda took a greater role and BAR team was rebranded. Richards was also a leading figure in the Benetton F1 team in the late 90s.
Most interestingly for motorsport fans, Prodrive owns a slot to enter the 2008 F1 World Championship. But the consortium has called 'unfounded' speculation that Prodrive may now brand its F1 cars Aston Martin.
Also in the consortium with Dave Richards is finance and shipping banker John Sinders and two Kuwaiti investment companies.
Mr Richards reassured Aston Martin fans that the new owners were committed to the company long term and would not be seeking a quick turnaround like many private equity groups do.
Exciting future
As well as the potential for an Aston Martin presence in F1 racing to excite fans, the new owners of the company have announced plans to step up production by more than a quarter in the next three years.
Growth will be driven by the launch of two new models - the DBS, as seen in latest James Bond Casino Royale, and the four-door Rapide - taking the marque's range to seven cars.
At least 200 more workers are expected to be taken on at an expanded Warwickshire plant as a result.
Questions ahead
But looking further ahead, the biggest question facing the new owners is, without the backing of a well-funded major car group enjoyed by many of Aston Martin's main rivals, whether they will have enough cash to spend on developing the brand's cars to keep them ahead of the competition.
A further threat is looming EU car emissions regulations. If these are implemented on a per-manufacturer basis, that would present a major problem for independent car makers like Aston Martin, unable to meet average emissions limits across their range by balancing the inevitably higher output of their powerful sporting models against low-emissions city cars, as large car groups will be able to.
For the company to survive under such an imposed EU regime, huge investment would be needed to produce low-emissions powerplants that nevertheless maintain the required level of power and performance. Though it remains to be seen exactly how the EU will enforce the lower emissions limits on car makers that have been agreed.
By Stuart Coster.
Visit the Blog about aston martin oregon portlandThe History of James Bond Model Cars
The production of Corgi's first Aston Martin DB5 model in 1965, which was based on the car featured in Goldfinger complete with ejector seat, coincided with the beginning of the Bond phenomenon, but the success of the company's James Bond model cars could hardly have been predicted.
Three years later Corgi had sold 3.9 million units of the DB5 making it an instant and - judging by the fact it is produced to this day - timeless classic. Much sought after as collector's pieces, if you are lucky to own one in pristine condition from the early 1970s the value is something in the range of £200-£300, although why would you want to part with it at all? And if you have one showing some wear and tear, the value is probably something of the order of £50.
Corgi is currently going strong and with each new James Bond film it produces another of its die-cast classic scale models, which are keenly snapped up by collectors. And although it is easy to see Corgi as a company producing children's toys, nothing could be further from the truth – when in the '80s the company suffered from a downturn in the toy market due to computer games and the like taking a significant amount of market share the company took a long hard look at what it was doing and deliberately refocused on the adult collector.
The change of strategy paid off with a huge increase in sales as James Bond models other collectible cars were snapped up. Corgi has continued to develop its ranges and current models in the James Bond range in clued a gold-plated collectors edition DB5 model car, proving the eternal interest in this car.
While Corgi has been well established in Britain for years, it is not the only company to hold a license to produce 007 cars - RC2 produced 1:18 scale models including the DB5 and the Aston Martin DBS from Casino Royale, while radio controlled versions of the cars are available from Nikko.
And proving that the market for 007 model cars remain strong, there is a new magazine aimed at Bond model car collectors. It's called The James Bond Car Collection and in addition to a full colour magazine each copy includes a 1:43 scale model from one of the films.
By David Leigh.
