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Aston Martin seeks ‘big brother’ despite first profit in years, IPO talk

Aston Martin just reported that it earned $121 million (or GBP87 million) in 2017, its first profit in eight years, and it's preparing for a possible initial public offering, eyeing a valuation as high as $6.95 billion (GBP5 billion). It has a strategy to begin converting its fleet to hybrid and electric powertrains. Nevertheless, the low-volume British luxury marque says it needs a helping hand to survive the wave of autonomous driving technology sweeping the automotive industry. CEO Andy Palmer tells Bloomberg it's looking for a "big brother" partner to help it with the billions of dollars in capital requirements posed by the dawn of driverless cars. "We are making a new kind of company, a company that can survive on 7,000 to 14,000 very highly priced, very profitable cars a year, but it can survive because of its partnerships," Palmer told Bloomberg TV. "It can be very profitable on that 7,000 to 14,000 cars a year but only by having a big brother that can help it out." Palmer said Aston Martin already has a partnership with Daimler AG, which owns a 5-percent stake in the company, to develop autonomous capabilities, but more help is needed. One assumes he is envious of competitors like Rolls-Royce and Bentley, which benefit from the corporate parentage and financial resources of BMW and Volkswagen, respectively. Sales grew 48 percent in 2017 to nearly 5,100 units, Aston's highest sales volume in nine years, on the strength of the DB11 sports car, which starts at $211,995. It was enough for Palmer to proclaim in a release, "The financial turnaround of Aston Martin is now complete." While it shops around for a sugar daddy, Aston Martin is busy building a new factory in Wales, set to open in 2019. It has launched new models like the DB11 Volante and Vantage, plus the limited-production DB4 GT Continuation model. Further out, the company is building 155 examples of its first electric car, the RapidE, due in 2019, and it's developing an electric version of the DBX crossover, also for 2019. Palmer has said Aston Martin will offer all six of its vehicles in hybrid variants by 2025, with 25 percent of its vehicles to be fully electric by the end of the 2020s. Related Video: Image Credit: Aston Martin Aston Martin Autonomous Vehicles Electric Luxury aston martin rapide aston martin vantage aston martin db11 aston martin dbx aston martin db11 volante

Aston Martin CEO plans for seven-vehicle lineup

Aston Martin which has survived for the last hundred or so years with a remarkably tiny vehicle lineup, is now making preparations for its next seven vehicles, according to the company's CEO, Andy Palmer. The CEO elaborated on the company's "Second Century Plan" explaining that it'd feature a three-pillar product road map that is apparently "crystal clear." Pillar one, sports cars, should surprise no one. The three-pronged lineup will continue, with the new DB11 sandwiched between the Vantage and Vanquish replacements. But don't expect more than three Aston sports cars – Palmer shut down the idea of a car below the Vantage. Next, we have "saloons," which means sedans, if you prefer coffee to tea and Hershey's to Cadbury. This is trickier, of course. In April of 2015, we reported that the Rapide sedan would die and that the DBX would be its replacement. But in October, we reported that the Rapide name may live on as an all-electric model. That same April report also claimed we'd see a Lagonda-badged sedan, which now seems like a virtual certainty following the success of the rare Lagonda Taraf. The tea leaves of pillar three – crossovers and "specials" – are the most difficult to read. We know the rakish DBX crossover is coming. But we're wagering that Aston will complement its CUV/SUV lineup with something more traditional that could combat stuff like the Bentley Bentayga. But rather than badging it as an Aston, we think it's more likely this hypothetical vehicle would be badged as a Lagonda. Here's why. The last thing we wrote about a Lagonda SUV came in July 2014, when reports indicated that plans for such a vehicle had been abandoned. But with the explosion in CUVs at virtually every price point, it seems impossible for Aston Martin to ignore the segment. This would give the company a two-pronged approach. We doubt Aston would reestablish the Lagonda brand to just sell a single vehicle. What about the specials, though? That sounds like low volume and high performance to us, which could mean a One-77 successor. Aston has gone on record as saying it'd be open to aerodynamic god Adrian Newey penning a hypercar design. In fact, regarding a Newey-designed Aston, Palmer himself said, "There is rarely smoke without fire." If this were to ever happen, though, we're betting it won't be for some time. The DB11, Vantage/Vanquish replacements, and DBX will be the first new vehicles from the brand, Palmer indicated.

Weekly Recap: Marchionne's Manifesto again calls for industry consolidation

Sergio Marchionne isn't taking no for an answer. Despite public rebuffs from General Motors and Ford, the leader of Fiat Chrysler Automobiles continues to push for consolidation within the auto industry. His latest assertion came Wednesday when he said a combination of FCA with another automaker could net savings of $5 billion or more annually. No, this isn't about selling his company, he claimed, it's about cutting costs. Put simply, the auto industry wastes money, Marchionne said during FCA's earnings conference call. Companies invest billions to develop basic components that all cars use, but many consumers don't care how they work or recognize the differences. "About half of this is really relevant in terms of positioning the car in the marketplace," he said. "The other half, in our view, is stuff which is neither visible to the consumer nor is it relevant to the consumer." In 2014, top automakers spent more than $100 million on product development, FCA estimated. Marchionne said consolidation could save up to $1 billion on powertrains alone, noting that almost every automaker offers four- and six-cylinder engines. Not everyone has to make their own, he contended. "The consumer could not give a flying leap whose engines we are using because they are irrelevant to the buying decision." That's pretty provocative for enthusiasts, but less so for average consumers. Still, there are major differences in power and efficiency ratings, even among similar engines. Skeptics could argue consolidation would also weaken competition and reduce choices for car buyers. Marchionne stressed his presentation, curiously entitled Confessions of a Capital Junkie, wouldn't require closing factories or dealerships. It's not his final "big deal" as CEO, intent to sell FCA, or a way to elevate his company up the automotive food chain. He claims he wants to fundamentally change the industry and its habit for burning cash. "The horrible part about this, and the thing that I find most offensive, is that the capital consumption rate is duplicative," he said. "It doesn't deliver real value to the consumer and it is in its purest form, economic waste." Other News & Notes Ford Profits dip in first quarter Ford profits fell $65 million to $924 million in the first quarter, hampered by slight dips in revenue and sales.