Aston Martin’s new SUV helps carmaker beat sales forecasts

Demand for the new Aston Martin sport utility vehicle and higher selling prices helped the luxury carmaker beat sales expectations in the first quarter as it shrugged off the pandemic and the industry’s chip crisis.

Pre-tax losses narrowed from £110.1m a year ago to £42.2m, while revenues hit £224.4m, better than the £196m analysts had forecast.

The DBX, the company’s first SUV, accounted for more than half of sales, and helped drive interest from China, women and buyers new to the brand.

Shares rose 3 per cent to £19.61 in early morning trade on Thursday.

Three years after a disastrous stock market float, Aston Martin is under the management of Lawrence Stroll, a Canadian billionaire who led a bailout last year and brought in Mercedes-Benz owner Daimler as a top shareholder.

Over the past year the company has destocked its dealerships of excess cars, an attempt to restore the luxury credentials of the brand and prevent residual values of its vehicles sliding further.

The destocking, along with the DBX sales, helped raise the average selling price in the quarter from £113,000 a year ago to £149,000.

“The past is very, very happily behind us,” said Stroll, the group’s executive chair.

Unlike larger rivals, Aston Martin has not been affected by the chip crisis that has forced the industry’s largest companies, from Volkswagen to Ford, to suspend production for weeks at a time.

“Sometimes it’s pretty good to be a small company,” chief executive Tobias Moers said on Thursday. “At the moment we don’t see any great danger out of it.”

While the pandemic forced its UK dealerships to close for several weeks and staff at its factories to socially distance, the group’s plants at Gaydon and St Athan are turning out cars again, each one with a designated buyer.

“We now see natural retail demand,” Moers said, adding that “the female buyer group is increasing” for the DBX.

The SUV has taken the brand into the fastest growing and most lucrative part of the market, opening it to new types of motorists and increasing its appeal in China, the world’s largest luxury market.

“China really came back in all sectors, particularly in luxury sectors,” Stroll added, saying the growth was “driven by DBX”.

So far, there is also little cannibalisation from Aston’s other products, particularly its DB11 sports car that shares a lot of common parts with the SUV.

The group expects to produce about 6,000 cars this year, with a margin in the mid-teens, driven primarily by high-price “specials”, vehicles such as the Valkyrie, later in the year.

It also aims to reach 10,000 annual sales by the middle of the decade on the back of more variants of its DBX and by new models.

The first variant of the DBX is due out in the third quarter of this year.