Aston Martin Believes Mass Market Brands Face Extinction

I don't doubt it...but no one knows exactly how it will play out. In the end it will be the consumers who decide with their wallets which direction the auto industry takes along the way. Though no doubt there will be some big winners and big losers before it shakes out.

Just as the Village Smithy has all but disappeared - eventually there will be other forms of transportation that do no require contact with the ground. Some may be flying in some way - but even that would be eclipsed by "transporter" type technology. Add in the ability to appear in a 3D Hologram image in another place - and you get that the need for wheel bound cars will eventually be reduced to zero.

However - This change is not going to happen in what is left of MY lifetime. In fact - a conversion to EV's will not happen in MY lifetime as well.

More than likely cottage brands like Aston Martin will face extinction as manufacturers and will be Astons in name only. Mercedes is slowly exerting domination over Aston.

Brands will consolidate.

I think Andy Palmer is a dud. I am a DB9 owner (no, it is not the greatest car and yes it is poorly built and unreliable) who keeps it because of the huge depreciation I have suffered since 2014 (yes I knew it would depreciate) and the fun I have driving it within a 20-mile radius of my house. Overall its fun, but I wouldn't buy another one. My dailies are an S-Class and GL Mercedes.

Brands like Aston will get absorbed into larger car makers - as has happened with Lambo, Porsche, Bentley, Bugatti, etc. The VW "exotic" business model is the only one that makes financial sense I suppose (though no one outside of the VW accounting dept would know for sure!).

That VW strategy runs the risk of having "micro-differentiated" sports/luxury cars that are really quite similar aside from fancy trim, bigger engines, and mucho-technology. It will eventually become a problem. Badge and money aside - drive an Audi Q7 and/or a new VW Touareg and then drive a Bentayga or a Urus or even a Cayenne. Power and finishes aside, I'd say the rational/logical person would just spend $70K on the Audi and not choose the others, regardless of how much funding they have.

Annual service on a Bentayga or Porsche will run into the $1,000's just for maintenance while the same service on a simpler Audi will be $500 in the early years of ownership. Logical folks should just get an Audi.

The Q8 will be interesting - because it will likely make it even less compelling to buy a Urus or Cayenne. Curious to see which vehicles get traded for the Q8's.

Andy Palmer is unimpressive and I think he is wrong about this. As an Aston owner (and as a seasoned business executive who has experienced many talented CEO's) who has met Andy, he's not that impressive. I think Aston is merely rearranging the deck chairs on the Titanic till the next recession, where Aston will be no more. Sorry!

Car brands (Fiat, Chrysler, Peugeot, Opel, maybe even Mazda eventually)

Sorry..hit 'post' too soon...

....Car brands (Fiat, Chrysler, Peugeot, Opel, maybe even Mazda eventually will be no more) will consolidate which is really the point but for nationalistic reasons, local labor-market reasons, duty/tariff reasons, and to a lesser-extent personal consumer preference reasons, there will still be plenty of automakers around for a long time to come, though they probably will consolidate along national lines.

US = GM and Ford

Eurozone = some combo of VW and Benz (Bmw will likely get bought because it doesn't have scale)

India = Tata (Jaguar/LandRover)

Japan = Toyota and Honda (likely not Mazda or Subaru)

Korea = Hyundai/variations

China = Here is where consolidation will be brutal over the next 10 to 15 years. Sure Geeley owns Volvo and GM/VW produce locally - but as fast as the Chinese market grew, it will likely quickly morph into something else.

And no, Tesla will not survive :-)

This is all planned PR spin to help AM get an IPO off the ground... predict the death of all brands and not yourself... Carnival Barker, Andy Palmer is trying to line his pockets and make his stock cash-in more valuable... Utter Non-sense. if anyone is on the death march it is AM and the stupid antiquated products they produce and the future they talk about that will never materialize... all BS! Aston Martin is dying and the sooner the better. Their world wide dealers HATE them, and that is the best and only chance they had of survival... so enjoy the 1990's era products while you can get them.

Aston will be fully acquired by Mercedes. Mercedes will reskin products for Astons. Done.

Posters failed to understand the most important part of the article. As Palmer said, the more expensive the car, the easier it is to sell. First the Zagto variants, then the One77 Supercar. Now the Valkerie RB thing. And most recently the Homage recreations of the Aston Martin DB4 GT race car. Huge $$$$ at play here and all of these special short production models are insanely profitable for the firm. They can keep coming back to this well year after year with another limited edition and laugh all the way to the bank.

This is not a universal truth: "the more expensive the car, the easier it is to sell".

In theory, because there are rich people who can afford million-dollar cars, million-dollar cars should sell well.

The buyer with a million dollars to drop on a car will pick and choose very discerningly so those stratospheric cars are subject to the same dickering as a 4 cylinder Camry.

Moreover, as anyone who sells cars in the cars-as-jewelry segment will tell you, the sale is easiest when the hot new thing is hot and new and no one else has one. Then--as the hot new thing rapidly becomes yesterday's news among this clientele--they move on rather unceremoniously.

As for these cars being "insanely profitable" that's debatable because a car like a Chiron is VERY expensive to build and once the newness wears off the price becomes incredibly soft. It's not uncommon for these cars to sit a very long time waiting.

@MD Agreed. But that is where the shortest of short runs takes out the risk for the MFG. The $1.5M pound DB5GT recreations was a run of just 25 cars. The One77, just 77. The Zagato Vanquish models are equally low in their volume. I would suspect special cars like this go for the sticker price as you are invited to buy, if not you lose your spot to someone else. Just like Ferrari does. For Aston Martin, it is a good strategy and it can play a role in their overall profitability and independence as a brand. Considering they can do another 25 DB4GT Zagato recreations next year, and so on, milking their history to satisfy the ultra wealthy at 25 units a year, this train has a long way to run.

But if you're in business, betting the farm on cars like that is suicidal. Aston won't be independent. Mercedes will own them shortly.

@MD, if you were CEO would you approve the purchase and why? I am interested to know. Safer to have them as a client (as long as the parts bills are paid)?

Buy. Aston has always been a gentleman's tourer. They could take a Mercedes platform. Spit it out as a hardcore AMG and velvety British coupe. By creating two differently focused products off one platform, the potential for increased profit is there.

I also know that Aston should have an SUV that is old-school British and using the Mercedes GLS would be perfect.

Thus, Mercedes should absorb Aston for a variety of reasons.