DBX +2000 orders link4 Jun 2020 08:31
All eyes are on the DBX in the short term
The new bosses at Aston Martin have tweaked the carmaker’s ambitions over the mid to long term, but its success over the immediate future still lies on its first ever SUV, the DBX.
The newest model has fuelled its financial problems as it had to build a new plant in Wales to make them at a time when costs were rising and spending needed to be reigned in. This is one of the reasons why Aston Martin has had to raise such significant amounts of debt and equity over the last 18 months.
But, it is what Aston Martin is pinning all of its hopes on. A successful launch is the ‘most pressing objective’ in 2020 as the new type of car will widen the company’s appeal, particularly in fast-growing areas like China, and revive the unimpressive sales Aston Martin has achieved of late.
Despite the coronavirus having temporarily stopped work at the new production plant, things are back up and running and Aston Martin remains on schedule to start delivering the first DBX’s before the end of June.
The release of the new car will mean Aston Martin should find it easier to reset the business. For example, it will only produce DBX’s that have been ordered to ensure demand follows supply to avoid suffering the same problem with dealerships again, which should put it more in-line with other luxury carmakers.
It is important to note that demand for Aston Martin cars directly from customers has remained strong, just not enough to offset the severe decline in wholesale. Retail sales – as in those made from direct orders – were seeing double-digit growth before collapsing as a result of the coronavirus this year.
Plus, demand for the DBX has been ‘better than for any previous models’. It began taking orders in November, and so far it has secured over 2000 orders – the majority of which are directly from customers rather than through dealerships.
That means its order book is already stretching into 2021, giving it a firmer and more certain outlook to deal with. If the DBX proves to be as a success as hoped then Aston Martin intends to build upon it by releasing new derivative forms from 2021.
Having been let down so badly, investors will be keeping an eye on delivery and execution of the DBX and its other new models over the coming years. The DBX has to succeed if the carmaker wants to achieve its others goals and although demand looks solid, the uncertain economic picture going forward will cause concerns.
https://www.ig.com/uk/news-and-trade-ideas/where-next-for-aston-martin--200602
Sign In
Follow the stocks
