Saturday, 22 September 2018

On the luxury auto industry looking up and reaching down

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I advised yesterday that I would, despite the opening of the North American International Auto Show in Detroit, defer my automotive comment to today. There was a reason.

Today, January 15th, marks the 100th anniversary of the registration of a company called Bamford & Martin in London which, before long, became known as Aston Martin. It is barely a secret that I am a petrol head in general and a great fan of Astons in particular.

My passion for Aston Martins goes back to 1961 when as a small boy I was taken by one of my father’s junior officers in his DB4 at “One hundred miles an hour!”, in those days akin to the sound barrier. I can therefore claim to have loved the marque before Sean Connery, alias James Bond, got his hands on a DB5 in Goldfinger. Backed by 007 fame, the DB5 may now be the collectors’ model of choice but my heart continues to belong to my first love, the beautiful (and £150,000 cheaper) DB4.

Alas, owning the most valuable brand in Britain has not helped Aston and the company continues to struggle. There is an apocryphal story variously ascribed to the erstwhile owner David Brown (hence the DB) and to Victor Gauntlet, the chairman who sold out to Ford, thus rescuing the marque from certain failure, in which a dinner guest asked whether they might be sold a car at cost, the answer to which was supposedly “There’s nothing I’d rather do!”.

With Ford’s backing, the lower cost DB7 was introduced – it was Aston’s first “volume car” with a production of just over 1,000 units a year – and this saved the company. It was designed by that brilliant Scot, Ian Callum, who also designed the iconic Vanquish, the DB9 and the V8 Vantage, the latter two of which still provide the basic platforms for the current models. Callum went on to became design chief at Jaguar and, quite unusually, his brother, Moray, is head of passenger car design at Ford North America. Talk of a talented family!

Aston was sold by Ford to private interests in 2007 and now faces a future without the capital backing which every company needs in order to develop new models. Ferrari has FIAT and so does Maserati. Lamborghini has VW as do Bentley and Bugatti. Rolls Royce belongs to BMW. Porsche IS a volume car maker in its own right. The 100,000th Aston was built in 2003, 90 years after foundation. Porsche makes that many cars a year. Aston is not niche player but it lacks the backing to play with the big boys.

Hopefully, 2013 will be the year when it is reunited with Jaguar and Land Rover, albeit under the Tata banner. Rumour has it that potential buyers are waiting to acquire it from the receivers. The leadership of Ulrich Bez (he prefers to be known as Dr Bez) who replaced Bob Dover when he went on to run JLR has been nothing more than a fiasco as he has taken a Saville Row dressed gentleman and clad him in a shell suit and trainers. The V8 Vantage did draw in many Porsche drivers who fancied themselves as little James Bonds but most of them eventually returned to the more reliable VW beetle on steroids.

Happy 100th birthday Aston Martin.

Healthy luxury brands

Alas, back to Detroit. The automotive industry is in a good mood but that will not detract from the fact that volume car building is not really a profitable business, or at least not if one is looking beyond American build quality (or lack thereof). The Western luxury brands are in rude health with buoyant demand from China and it seems to be easier for luxury brands such as Daimler Benz or BMW to reach down than for the Fords and GMs to reach up. Finally, thirty years later than it should have been, these marques are discovering that they can sell the same small cars in Europe that they can in North America, a fact that was patently clear to the Japanese and the Koreans as they ravaged the incumbents’ market shares, first in America and then in Europe.

What long term lessons might have been learnt from the bankruptcies of GM and Chrysler and the near death experience of Ford has yet to be seen. Labour relations have moved forward but whether there is a sustainable model behind the long delayed replacement purchase boom in the US auto market is very much open to debate. I need to see how that new Chevrolet Corvette stacks up - is a real runner or is it just another huge power unit which won’t go round corners and from which bits fall off when it hits the first pot-hole in the road - and of those there are plenty in the US.

For choice, I’d still favour Ford (the credit as well as the car) over GM or Chrysler and not only because the other talented Mr.Callum works there.

Meanwhile, I shall this evening be raising a glass to Robert Bamford and Lionel Martin and I will happily remind Porsche and Ferrari owners that while their favoured car makers were formed after WW II mine predates WW I.

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