Aston Martin has taken a significant step to what the iconic British automotive brand hopes will be salvation as the first of its new line of DBX SUVs rolled off the production line. The DBX, which starts at £160,000, is Aston Martin’s first attempt at a 4×4 vehicle. It’s also possibly Aston Martin’s last hope at securing a future and avoiding a record eighth bankruptcy, with the company’s finances tied inextricably to the new model’s success.
Aston Martin employees, investors and fans are relying on DBX sales to lead a turnaround. The company has needed emergency investment a number of times since going public through a 2018 IPO, with sales figures disappointing and cash burned through at an alarming rate.
The most recent rescue mission has been led by a major investment by Canadian billionaire and F1 entrepreneur Lawrence Stroll. With a strong track record in the luxury goods and services niche, as well as his involvement in F1 through the joint ownership of Racing Point team (soon to be rebranded Aston Martin), Stroll believes he knows what to do to bring success back to the brand.
However, nobody, including Stroll, is under any illusions that the road ahead will not be a tough one. One that will need to be navigated with the help of an SUV. The coronavirus crisis made an already sticky situation even more challenging for Aston Martin and the last couple of months have seen job cuts announced and the company’s chief financial officer replaced.
Aston Martin is also not the only luxury car brand in the 4×4 market. In fact, it is rather late to the party with rivals including Bentley and Rolls-Royce having already released models the DBX will be competing against.
The company has arranged a £20 million loan from the UK government’s coronavirus rescue scheme. It also informed shareholders it is to draw down £55 million from a debt facility arranged last September. The bad new is that it is a rather expensive one, charging 12% interest.
The Aston Martin share price was ticking up in morning trading today with a gain of close to 0.5%. It is down over 91% since making its stock market debut in late 2018.
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