Aston Martin - Opportunities and Threats Under New Ownership

The big news this week for Aston Martin fans isKuwaiti investment companies.
that the luxury sports car maker made famousMr Richards reassured Aston Martin fans that the
by James Bond 007 is heading back into Britishnew owners were committed to the company
hands.long term and would not be seeking a quick
Ford announced that they have sold the companyturnaround like many private equity groups do.
to a UK-led group fronted by Dave Richards -Exciting future
boss of respected motorsport specialist Prodrive -As well as the potential for an Aston Martin
for £479 million.presence in F1 racing to excite fans, the new
The American car giant has had a big stake inowners of the company have announced plans to
Aston Martin since 1987, buying the companystep up production by more than a quarter in the
outright in 1994 and overseeing a period ofnext three years.
unprecedented sales success. Under Ford'sGrowth will be driven by the launch of two new
ownership, the company developed a number ofmodels - the DBS, as seen in latest James Bond
respected new models and reported record salesCasino Royale, and the four-door Rapide - taking
of 7,000 cars in 2006.the marque's range to seven cars.
But with the onset of Ford's financial troubles, theAt least 200 more workers are expected to be
group decided to sell the luxury marque. Ford losttaken on at an expanded Warwickshire plant as a
more than $12bn in 2006, and faces hugeresult.
restructuring costs. However the group has stillQuestions ahead
held on to a £40 million slice of theBut looking further ahead, the biggest question
company.facing the new owners is, without the backing of
The sportscar specialist will remain at itsa well-funded major car group enjoyed by many
purpose-built factory in Gaydon (Warwickshire),of Aston Martin's main rivals, whether they will
where 1,800 people are employed.have enough cash to spend on developing the
Prodrive successbrand's cars to keep them ahead of the
Under the leadership of Dave Richards, Prodrivecompetition.
has built a formidable reputation in motorsport,A further threat is looming EU car emissions
running the Aston Martin racing team in the sportsregulations. If these are implemented on a
car series around the world as well as theper-manufacturer basis, that would present a
highly-successful Subaru rally team.major problem for independent car makers like
Dave Richards also managed the BAR FormulaAston Martin, unable to meet average emissions
One team from 2002 to 2004, taking the teamlimits across their range by balancing the inevitably
from eighth to second in the manufacturers worldhigher output of their powerful sporting models
championship in that period, before Honda took aagainst low-emissions city cars, as large car
greater role and BAR team was rebranded.groups will be able to.
Richards was also a leading figure in the BenettonFor the company to survive under such an
F1 team in the late 90s.imposed EU regime, huge investment would be
Most interestingly for motorsport fans, Prodriveneeded to produce low-emissions powerplants
owns a slot to enter the 2008 F1 Worldthat nevertheless maintain the required level of
Championship. But the consortium has calledpower and performance. Though it remains to be
'unfounded' speculation that Prodrive may nowseen exactly how the EU will enforce the lower
brand its F1 cars Aston Martin.emissions limits on car makers that have been
Also in the consortium with Dave Richards isagreed.
finance and shipping banker John Sinders and two