Aston Martin (AML.L) unveiled a trio of vehicles today, including its new Formula 1 race car, as the British luxury automaker aims for a strong 2024 after a somewhat challenging 2023 both on and off the track.
Gaydon, England–based Aston Martin also showed off its updated Vantage sports car, an important part of its portfolio in the “entry-level” luxury sports car segment, with prices starting the $150,000 range. The third car Aston showed off is its Vantage GT3 race car, which will compete in endurance racing.
For mere mortals, the new Vantage road car features a more sculpted exterior design, a refreshed interior, and more powerful engine, with its AMG-sourced twin-turbo V8 pushing out 656hp, 128hp more than before.
“[It’s] a very exciting time at Aston Martin; we've never had so many launches in one back-to-back period of time in the company's history,” Aston Martin executive chairman Lawrence Stroll said in an interview with Yahoo Finance, regarding the company’s recent launches including its DBX SUV. “So carrying on from the success of DBS to DB12 on to Vantage. And next year we'll come with our first mid-engine hybrid program with Valhalla, [so] very exciting times for the company.”
Aston’s look ahead to 2024 comes after a challenging year where Aston's road car business had to raise money on a number of occasions — and now counts Saudi Arabia’s PIF, China’s Geely, and Lucid as new shareholders. Stroll, who made his billions in fashion and textiles, is still the majority shareholder in Aston Martin.
The road car business — separate from Aston’s F1 racing team, which Stroll owns outright — also had to cut its production outlook in 2023 due to shortages. Aston did say though that demand is “very strong with DB12 orders.” Aston will give its full-year financial update on Feb. 28.
Stroll said looking ahead to 2024, Aston’s customers are more bullish on the global economy, and with stocks at all-time highs he’s not seeing much uncertainty, at least in Aston showrooms. “We don't feel any recessionary mood from our customers at all; as a matter of fact, we just see considerable growth.”
Despite a stronger luxury consumer, there’s still work that needs to be done. Stroll has been consistent that one crucial part of the success of any luxury business is to hit a 40% contribution margin.
In accounting parlance, contribution margin differs from regular gross margin in that it excludes fixed costs and focuses on variable costs such as materials, variable overhead, and sales commissions. In theory, it is supposed to give a better view of a business — and how much it actually earns from sales.
“The DBX 707 [SUV] was the first vehicle under my stewardship that was launched with a minimum ... of 40% contribution margin. And I mentioned then, and now it holds true, that every vehicle to be launched after — the first was DB12, second will be Vantage — will all have a 40%-plus contribution margin. So we're doing exactly that,” he said.
Stroll on the 2024 F1 season — and Aston’s chances
Finally, Stroll is confident the Formula 1 race team is on the path to more success. The team finished fifth overall in the Constructors' Championship, but the team’s performance tailed off following initial success.
The 2024 Formula 1 season — which hasn’t even started yet — is ablaze with excitement and controversy. Earlier this month Mercedes star driver Lewis Hamilton said he would be leaving his longtime team for Ferrari next year. And Red Bull F1, the most successful team of the past three seasons, is embroiled in scandal with team principal and CEO Christian Horner accused of inappropriate behavior towards a colleague.
Stroll didn’t comment on the drama engulfing the F1 preseason, though he did say the team is shooting higher this year.
“Our goals this year are to finish better than fifth and to look forward to take our first race win in our Aston Martin British Racing in Green,” he said from the team’s headquarters, commenting on a season that will feature a grueling 24 races across the globe.
“Twenty-four is a lot of races, most it's ever been on a Formula 1 calendar in history, so that'll be challenging for all the teams and the guys and the girls and the families involved with them. But we're anticipating a really exciting year in Formula 1, and we'll think closer and closer racing [among the teams] is our belief."