New Aston Martin boss outlines plans for profitability

Aston Martin is aiming for record annual sales of around 8000 a year as part of new boss Adrian Hallmark’s plan to return the persistently loss-making company to profit.

Hallmark, formerly boss of Bentley, told investors he’d undergone “60 days of intense learning” since joining the company at the start of September. 

His first move was to shrink previously guided sales targets for this year to around 6000 units from more than 7000, citing supply-chain issues as well as low Chinese demand. 

The hard reset battered the company share price, dropping its valuation below £1 billion for the first time since it was listed in 2019.

However, last week Hallmark shared his vision of a more positive future as he outlined his plans to finally propel Aston Martin into the ranks of profitable ultra-pricey car companies, including Bentley, Ferrari, Lamborghini and Rolls-Royce. “My priority going forward is maximising the incredible commercial potential of the brand,” Hallmark told analysts on 2 November during the company’s third-quarter earnings call.

Right now, Aston Martin still eats more cash than it generates. The company posted a £26.7 million operating loss for the three months ending in September, taking its loss for the year to £133m.

Hallmark pitched to investors the possibility of light at the end of this dark tunnel, drawing on his experience at Bentley to give credibility to his message. Among his plans were an “intense approach” to controlling costs as well as unlocking an increasingly lucrative market for extras. “The number of options that we offer compared with competition is significantly lower,” Hallmark said.

Analysts pushed Hallmark on the reasons behind unfavourable comparisons between Aston Martin and his old brand, Bentley, starting with the stubbornly low annual sales. “Bentley last year sold twice the volume of Aston Martin with arguably a more condensed product line-up, which started at a higher price point,” said George Galliers, analyst at banking firm Goldman Sachs. “Why is Bentley able to achieve so much higher volume than Aston Martin, with seemingly a product line-up that addresses a smaller market?”

Last year, Bentley sold 13,560 cars compared with 6620 for Aston. Aston had originally guided for “high single-digit-percentage growth” in wholesales (sales to dealers) this year, which would have propelled it past 7000 for only the second time in its history. 

Hallmark’s course correction scuppered that, but he did promise to grow sales in the mid-term. “I think 8000 is probably a realistic level as a limit,” he said, but he also cautioned that hitting sales targets wasn’t a priority. “Bottom-line cash and profit are what we’re going to be obsessively focused on, not volume,” he said.

One reason Hallmark said that Bentley is so much bigger is that it started much earlier (in 2016)  with its best-selling Bentayga SUV than Aston Martin did with the DBX (in 2020). “It’s not a question of brand awareness as much as nameplate awareness,” he said, adding that DBX had more potential in the future.

Sales of the DBX actually halved in the first nine months of this year, although Hallmark said that was mainly because the brand had ramped down production ahead of the 707 overhaul that fitted the same modern infotainment system as seen in the new DB12, Vantage and Vanquish front-engined sports cars.

Aston Martin also doesn’t have an equivalent of the Bentley Flying Spur saloon, which accounts for around a third of sales for the Volkswagen-owned brand, Hallmark pointed out. He didn’t indicate that Aston Martin is working on a rival, although the delayed high-riding electric GT car will occupy a similar space.  

Analysts also took issue with Aston Martin’s thin order book. The company has maintained a ferocious launch pace – six new or overhauled models in 16 months – but only has orders stretching five months ahead, a potentially worrying sign that new models aren’t hitting the spot. 

Hallmark said the company should be aiming at six to eight months in terms of forward orders, but also said it was symptomatic of not getting the cars in front of customers fast enough after global launches. “Every time we’ve launched, we’ve had too much of a gap between the first communication and the full availability of products and marketing activity in every given region. This we have to shorten,” he said. 

Bucking that trend was the Valhalla mid-engined sports car, which is already sold out for its first year of production. Hallmark confirmed it will be launched in the first half of 2025, with sales starting in the second half. 

The low-volume hybrid-powered Valhalla will help Hallmark in his goal to raise the average selling price of Aston Martin cars from £250,000, the year’s current figure. 

Getting customers to pay more is key to Aston’s survival and Hallmark has already identified areas where the company is leaving money on the table. For example, there aren’t options available on ‘core’ models including the Vantage and DB12. “Therefore it’s no surprise that our options uptake is lower than the competition,” Hallmark said. “Over the course of the next six to nine months, we will systematically launch more content for our customers.”

Hallmark helped grow the Mulliner bespoke option range while at Bentley and he referenced that as well as Lamborghini’s Ad Personam service as part of his promise to extend Aston Martin’s Q bespoke range, calling it a “significant” opportunity to boost revenue.

Hallmark’s decision to slow Aston’s breakneck rush to spend the latter part of this year building the newly launched models, including the V12 Vanquish, will give the company a more manageable growth timetable, he promised. Next year, the company will be able to focus on marketing those new core models, with only the launch of the Valhalla and other “specials” to worry about.

Analysts reacted favourably. “New CEO Hallmark continued to make a good impression with detailed answers,” Philippe Houchois, analyst at banking firm Jefferies, wrote in a note to investors. 

However Houchois warned of the risk of a “zombie” balance sheet, where even Aston’s improving income doesn’t make a dent on the company’s formidable debt mountain of more than £1bn. There’s a “high probability” the company will need to raise more money next year, he said.

Neither Tobias Moers from AMG nor ex-Ferrari boss Amadeo Felisa, the two Aston CEOs preceding Hallmark, were able to convert their previous experience into making the company profitable. Hallmark’s still-fresh memories of turning around Bentley, along with a sparkling new range of cars, could yet bring the success Aston has been waiting so long for.