Interview Synopsis

Aston Martin Lagonda – H1 2023 Update

  • Credit
  • Consumer
  • Europe

Prices need to go up and costs need to come down at Aston Martin if the company is to meet its 2023 EBITDA goal of 20%, an executive at a British auto manufacturer told Third Bridge Forum.

Can Aston Martin achieve its 2023 units goal?

Aston Martin is guiding approximately 7,000 units for 2023, which our expert believes is achievable thanks to supply chain bottlenecks easing and demand growing. However, they believe short-term growth could be more challenging with its current product portfolio. “If they stabilise, maybe they will grow to 8,000 by 2025, based on the launches of the new cars that they’re working on.”

Aston Martin’s target is to reach 10,000 units by 2025, but our specialist believes the company needs “something else in order to get these additional 3,000 cars”. Refreshing its sports car line up, increasing SUV volume and BEV production (planned for 2025) were among the key points highlighted. This is important because we were told the Aston Martin brand is powerful but lacks in performance vs competitors including Lamborghini, Porsche, Bentley and Ferrari. As we heard, premium manufacturers are also attacking the luxury SUV space. With that said, Aston Martin’s new DB12 this autumn should signal that the company is on the right trajectory.

The expert also believes there is an opportunity for Aston Martin to extract more value from its current products as well as differentiate its standard range from its bespoke range to create a sense of exclusivity. “They need to understand how to create packs for people, instead of selling standalone options. Creating packs and customisations that are tailored to different types of consumers… can increase the amount of money that each one will spend.”

Aston Martin is guiding 20% EBITDA margin for 2023, but this might be a tall order, in our expert’s view. Among their remarks was that to reach 20%, Aston Martin needs to reduce its costs and increase its prices by 10%. “The price… I think you can get there in 2025, to some extent you can turn it around. It’s the cost that worries me a little bit more.”

An EBITDA margin of 15-16% is more realistic for 2023, our Interview suggests. When it comes to CAPEX, the specialist is most concerned about the significant investment required to produce a battery-operated electric vehicle. 

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The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.

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