Skip to main content
Sister Publication Links
  • Automotive News
  • Automobilwoche
  • Automotive News Canada
  • Automotive News China
Subscribe
  • Subscribe
  • Newsletters
  • Login
  • HOME
    • Latest news
    • Automakers
    • Suppliers
    • New Product
    • Environment/Emissions
    • Sales By Market
    • On The Move
    • Auto Shows
    • Munich Auto Show
    • Geneva Auto Show
    • Paris Auto Show
    • Beijing Auto Show
    • Shanghai Auto Show
  • Features
    • Long Read
    • Interview of the Month
    • Focus on Electrification
    • Focus on Technology
    • Segment Analysis
    • Cars & Concepts
    • Supplier Spotlight
    • Europe By The Numbers
  • Opinion
    • Blogs
    • Commentary
    • Guest columnists
  • Photos
    • Photo Galleries
    • Geneva Photo Gallery
    • Beijing Photo Gallery
    • Frankfurt Photo Gallery
    • Paris Photo Gallery
    • Shanghai Photo Gallery
  • Podcasts
  • Car Cutaways
  • EVENTS
    • ANE Congress
    • ANE Rising Stars
    • ANE Eurostars
    • Meet the 2021 winners
    • Browse photos from the 2021 awards ceremony
  • More
    • Publishing Partners
    • Social Media
    • Contact Us
    • Media Kit
    • About Us
    • Capgemini: Securing the industry's future through a radical rethink
    • Capgemini: Succeeding with the automated driving journey through AI
    • HEXAGON: Plugging into data is the only way to make winning EVs
    • TUV Rheinland: Battery testing center for large battery packs and more
    • TUV Rheinland: Ideas, services and certifications for smart mobility
    • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
    • Toyota Europe
    • UFI Filters
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter
MENU
Breadcrumb
  1. Home
  2. Automotive News Europe
May 09, 2018 01:00 AM

Aston Martin's Palmer brought Nissan ideas to superluxury niche

Nick Gibbs
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    Palmer came to Aston Martin after 23 years at Nissan.

    LONDON — The world's most contented Aston Martin customers today are Philippe and Marcus. Later this year, Richard will be similarly pleased, as will Charlotte in 2019.

    Why? Because they've all had cars designed around their specific lifestyle and needs. Their contentment is illusory however, as these people don't exist. They're all "archetype" customers who were dreamed up to give Aston's designers a clearer idea of who they were designing for.

    For example, the DB11 grand tourer was built for Londoner Philippe, a banker so confident in his demeanor he might well wear an archaic bowler hat simply for the fun of it.

    Philippe, Charlotte and the gang are one of many ideas Aston Martin's CEO Andy Palmer brought with him from Nissan when he joined the company in late 2014. The DB11 was his first new model as CEO.

    He arrived as Aston Martin was flickering back to life after one of its many hard resets, and its backers wanted an executive with the experience and vision to ensure this time the lights would stay on. Palmer, an engineer-turned-marketing guru whose raw instinct saw him promoted to Carlos Ghosn's right-hand man in his 23 years at Nissan, was that guy.

    Three and a half years later and Palmer has just launched his second new model, the Vantage entry sports car, from a pipeline stuffed with fresh metal. Earlier this year he was able to announce a nine-year sales high for 2017 at 5,117 cars, and his first annual profit.

    "He's done a solid job. He's applied his big-auto experience very well to Aston," said IHS Markit analyst Tim Urquhart.

    Palmer diagnosed Aston's problem fairly quickly.

    "It was a fantastic brand but not a fantastic business," he said in late 2015. "Basically there was no foresight beyond funding the next vehicle. That wouldn't earn enough to fund the vehicle after that and it would go into receivership."

    Palmer reckoned the brand went bankrupt seven times in its first 100 years, and he created a plan to prevent that in its second century.

    'Up to its ears' in debt

    The first step was to put funding in place to launch one new model at least every year, even if that meant Aston was "geared up to its ears" in terms of debt, as CFO Mark Wilson memorably put it. But that wasn't going to be sustainable. "You don't fund car companies with debt, you fund car companies with equity," he said.

    So, Palmer applied lean processes to what had become a bloated organization.

    "It's about corporatizing this business," he said. "It's about bringing the best of large-scale OEM practices to this niche."

    As a brand, Aston Martin speaks of wealth and opulence, but at its headquarters in Gaydon in central England, the bean counters went to work. Palmer announced his intention for Aston to be "world-class in terms of costs." Wilson was ordered to take what he called a "good hard scrub" of SG&A (sales, general and administration) and Aston cut 295 nonmanufacturing jobs from a total workforce of 2,100.

    Expenses were also clamped. Flying back from the 2015 Geneva auto show, Palmer was spotted in economy class. Suppliers were scrutinized. Aston aimed to take 10 percent out of the parts bill every year, something that was common practice elsewhere.

    "Andy has done it in the big OEM world where there's a constant cadence of taking out fractions and fractions. If you're selling 5,000 a year, a £10 reduction per car is worth having," Wilson said. "That wasn't happening in the company before."

    Aston also has been pushing to find more suppliers in low-cost countries such as India and China.

    Investment was selective. A new sports-car platform was key, but updates to the Gaydon factory were applied cautiously. For example, there has been no big spend on robots.

    "We only automate what we absolutely need to automate," Aston's production director, Keith Stanton, said last year. "With other OEMs there's higher level of automation that's probably required, hence a certain amount of underutilization."

    However, Palmer sanctioned a new logistics center and, the big one, a new factory in Wales to build the DBX SUV arriving in 2019. Aston could have stretched capacity at Gaydon, but Palmer isn't a fan of a three-shift day.

    "The extra money you put in and the extra production you get out is not linear. Normally it's better to build a new factory, in my experience," he said. However, Palmer played a smart game to wring financial support from the U.K. government, who recognized the PR value of keeping Aston manufacturing in the U.K. when local investment was thin on the ground.

    Beyond James Bond

    Palmer also promised to apply "more mathematics" to the marketing ("It goes well beyond sponsoring a Bond film every three years") and diversify the customer base. He pointed out that in the first 100 years, half the 70,000 cars Aston sold in total stayed in the U.K. and only 3,500 were bought by women.

    Perhaps Aston's greatest asset other than the brand itself is its Daimler relationship. Daimler supplies Aston's V-8 turbocharged engine but more crucially the electrical architecture that allows a small company such as Aston to stay up to the date with infotainment, active safety and related legislation. "It's practically impossible to develop that ourselves," Palmer has said.

    Building this relationship was perhaps Palmer's biggest coup, says Arndt Ellinghorst, global head of automotive research for Evercore ISI.

    "He's keeping the brand true and honest to its core values whilst outsourcing core technologies to deliver best-in-class performance," he said. "Makes total sense to me."

    Aston has cut its debt from 3.8 times its earnings in 2016 to 2.1 times last year, the company announced, and is investigating whether to take ownership public via a share offering. But Aston watchers are wondering how some of Palmer's grander plans — for example, relaunching Lagonda as a standalone electric brand — can be done without a larger partner.

    "There are still big gaps in the strategy," IHS's Urquhart said.

    Palmer refutes the need for a "big brother."

    "With a small company you have agility and you engender creativity," he said this year.

    A grounding in car manufacturing is Aston's strength, Palmer says.

    "We know how to engineer a suspension system, a steering system, make a stiff body. That's our advantage. The bits we don't know we'll learn."

    RECOMMENDED FOR YOU
    Hyundai Europe boss Michael Cole to speak at Automotive News Europe Congress
    Related Articles
    The big boom in ultraluxury
    In the stratosphere of the superrich, buying a car is about the experience
    Recommended for You
    Mike_Cole_Hyundai_2020
    Hyundai Europe boss Michael Cole to speak at Automotive News Europe Congress
    Aldo Kamper Leoni 2022
    CEO of wiring systems supplier Leoni to speak at Automotive News Europe Congress
    Wolfgang Bremm von Kleinsorgen Mercedes web
    Mercedes Central, Eastern Europe boss von Kleinsorgen to speak at Automotive News Europe Congress
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get Free Newsletters

    Sign up and get the best of Automotive News Europe delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    SUBSCRIBE TODAY

    Get 24/7 access to in-depth, authoritative coverage of the auto industry from a global team of reporters and editors covering the news that’s vital to your business.

    SUBSCRIBE NOW
    Connect with Us
    • Twitter
    • Facebook
    • LinkedIn
    • Instagram

    Founded in 1996, Automotive News Europe is the preferred information source for decision-makers and opinion leaders operating in Europe.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI  48207-2997
    Tel: +1 877-812-1584

    Email Us

    ISSN 2643-6590 (print)
    ISSN 2643-6604 (online)

     

    Resources
    • About us
    • Contact Us
    • Advertise with us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Awards
    • Rising Stars
    • Eurostars
    • Leading Women
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Automotive News Europe
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • HOME
      • Latest news
      • Automakers
      • Suppliers
      • New Product
      • Environment/Emissions
      • Sales By Market
      • On The Move
      • Auto Shows
        • Munich Auto Show
        • Geneva Auto Show
        • Paris Auto Show
        • Beijing Auto Show
        • Shanghai Auto Show
    • Features
      • Long Read
      • Interview of the Month
      • Focus on Electrification
      • Focus on Technology
      • Segment Analysis
      • Cars & Concepts
      • Supplier Spotlight
      • Europe By The Numbers
    • Opinion
      • Blogs
      • Commentary
      • Guest columnists
    • Photos
      • Photo Galleries
      • Geneva Photo Gallery
      • Beijing Photo Gallery
      • Frankfurt Photo Gallery
      • Paris Photo Gallery
      • Shanghai Photo Gallery
    • Podcasts
    • Car Cutaways
    • EVENTS
      • ANE Congress
      • ANE Rising Stars
        • Meet the 2021 winners
      • ANE Eurostars
        • Browse photos from the 2021 awards ceremony
    • More
      • Publishing Partners
        • Capgemini: Securing the industry's future through a radical rethink
        • Capgemini: Succeeding with the automated driving journey through AI
        • HEXAGON: Plugging into data is the only way to make winning EVs
        • TUV Rheinland: Battery testing center for large battery packs and more
        • TUV Rheinland: Ideas, services and certifications for smart mobility
        • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
        • Toyota Europe
        • UFI Filters
      • Social Media
        • Facebook
        • Instagram
        • LinkedIn
        • Twitter
      • Contact Us
      • Media Kit
      • About Us