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Aston Martin DB11 Saves Company as the Firm Focuses on US Sales

  • August 28, 2017
  • By Pete Nisbet
  • 0

The new Aston Martin DB11 has saved the company and helped it make a profit in the first half of 2017. This is the first initial half-year profit the car manufacturing firm has made 2008. The pre-tax profit for the first half of this year was posted as £21.1 million. The luxury car manufacturing company made a loss of £82.3 million last year.

Aston Martin DB11

Aston Martin DB11 Leads to Record Profit

Aston Martin achieved this record profit due to sales of the new DB11. Prior to its launch, Aston Martin was in serious financial trouble. The new DB11 model was responsible for a 67% increase in car sales to 2,349 vehicles. The company is famous for its sports cars driven by James Bond in the movies: the DB5 and DBS V12 models. It must be said, however, that these models came with several extras – unfortunately not optional extras to us normal buyers!

 

Aston Martin expects sales for the year to be more than twice that half-year number. Likely around 5,000 cars. Depending upon where you are, the new car retails at a minimum £155,000 ($200,500 US). At this price for the basic model without extras, that equates to around £775 million (over $1 billion). Sales such as these would enable to firm to make its first annual pretax profit for 7 years.

Aston Martin Investing in US and Japan

Around 20% of these on average would be exported to the US. The company is currently investing in boosting its sales in the US and Japan. It is doing so in the hope that it can increase its market share in the US, and “hopefully” also in Japan. This would reduce its reliance on Europe, which currently takes about 15% of Aston Martin’s production.

 

The company is also hopeful that increased US and Japanese sales would mitigate any delay in EU sales due to Brexit negotiations. The company is also concerned that once the UK leaves the EU, border checks and import tariffs could hit its income.

Brexit a Threat to Aston Martin

Although Aston Martin is a British company, it is mainly owned by investors in Italy and Kuwait. It is hopeful of turning the company around with a view to a stock market flotation before 2020. The biggest risk by far to Aston Martin is Brexit. That’s the main reason for the business investing in the US.

 

Brexit is almost sure to slow down UK car production in the beginning. While the UK car industry will likely pick back up again, the company sees no reason to rely on this. There is an option available, so why not use it.

About Pete Nisbet

Pete has been working in the field of website design and content for many years. He has a great interest in technology and current affairs, particularly business affairs. Pete's interests are technology, writing and world affairs and he is widely traveled. Pete also holds an Honors BSc from the University of Edinburgh.