'We will be profitable in 2009'.
Dubai: Ulrich Bez, chief executive of Aston Martin, talks enthusiastically about his brand's love affair with James Bond. But ask him which car the famed spy is going to drive in his next adventure, Bez does not know. On a brand-building trip to Dubai recently, he was, however, armed with ready answers about the company's growth strategy, the new majority owners from Kuwait and the luxury car market.
Gulf News: Since the focus nowadays is on the global financial crisis, can you talk about the financial health of your company?
ULRICH BEZ: We are profitable since 2004 and we will be profitable in 2009. We had in 2007 our best year in the company's 95-year history; 2008 was our second best year, and we will still be profitable even if 2009 is globally a year of downturn.
What impact are you witnessing on the top-end car business from the economic downturn?
We expect a 30-50 per cent downturn in this type of car in the first quarter. Aston Martin has seen a better-than-average result [in this period] with 30 per cent less sales than 2008. With the new cars to come out, the DBS Volante and V12 Vantage, and with the ongoing success and demand for the DBS, we think we can finish the year well. In 2008 we made nearly 6,000 cars and this year we will make 4,500 to 5,000 cars. This [reduced production] is the direct result of the hesitation in the market, the negative discussions in the market, and the negative reports in the press. We were the only car company at the Geneva motor show to show four new cars.
In terms of your priorities, are you focusing more on certain regions, and have you reduced your focus on some areas?
Nearly two years ago we modified our direction from having 30 per cent of our sales in America, 30 per cent in the UK, 30 per cent in Europe and 10 per cent in the rest of the world. We are now focusing on our sales outside the UK, US and Europe. We have seen first successes in this. We have started to sell cars in China, we started in the middle of last year in Russia, we have opened in Croatia, a first dealership in Eastern Europe that will be followed by Prague, and we have started our own dealer representation in Kuwait, which has a big success after a lot of under-representation.
Many car companies were focusing on countries like Brazil, Russia, India, China and Eastern Europe, but now cars sales are drastically down in these places as well.
But we are not in the mass market, we are not in the automotive business, we are in the luxury goods business. This has nothing to do with what the volume manufacturer has to achieve. We are in one place in Beijing and Shanghai, which cannot be considered as China, so what this means is that in these places there is a demand for a brand like Aston Martin. This has nothing to do with a global downturn or something else.
Is the dealership in Kuwait a result of Investment Dar's acquisition of the company?
We used to have a target of having 10 per cent of our sales all over the world, including the Middle East. We had a distributor in the Middle East that just distributed cars in some of the places, and four years ago we terminated this importership. We are doing this ourselves now. So this has nothing to do with Investment Dar's investment. [But] the quality of what we are doing now in Kuwait is of course with the support of Investment Dar.
There were reports that Investment Dar was considering selling its Aston Martin stake.
Investment Dar is not selling Aston Martin. I have said this before that Aston Martin is a core asset of Investment Dar, it is a long-term commitment, and there is no indication that Dar would sell its stake in Aston Martin. We are looking for a capital increase to finance the future growth of the company. We will grow the company at least by twice in the next five years by market, by new models. We need to the same thing [capital increase] as Mercedes is doing.
What has changed at the company since the new set of investments came in? Do you find them as long long-term partners?
Within Ford Motor Company, we were a very small wheel in their business. The change in ownership is something we wanted to have, not that Ford wanted to have it. We wanted to become independent as the management had plans and vision to grow the company. We could not realise this vision under Ford.
The new ownership of Dar approved the development of our Rapide [a new four-door car], which is a new car concept to be launched in September, and will come to the market in December and January. They allowed us to diversify our DB products, DBS Volante, which we should bring to the market in June this year. We have invested in a wonderful design studio and in engineering. This was the change under Dar. We have the support and understanding of Dar for growing and stabilising the Aston Martin brand and reviving the Lagonda. This is enough not to question the support from Dar, from our investors.
What is the percentage of Dar's stake?
It does not matter whether they have 51 per cent or 95 per cent. They have the majority stake and they give us the necessary support to run and grow the company. Aston Martin is the only car company that will have reasonable growth potential with two new products in about 70 new markets. We have 30 markets now and will have 100 in the future. In this market development, even if we make 15,000 cars in 100 countries it would be 150 cars per country. This is the dimension we are taking about.
Since you are talking about doubling the size of the company, would you need more funding from your shareholders or would you get new investors onboard?
We are looking for a capital increase. All the projects that I've mentioned are funded for this year but still there is a long way to go. This is why we are going for capital search wherever it comes from. We are speaking with individuals and companies, which we think are all over the world, in Asia, America in Europe and the Middle East.
Mention Aston Martin and James Bond comes to mind. Do you pay for featuring your cars in the movies?
We have a love affair with James Bond. Since we represent the best of British character it is quite a natural fit. We are not paying money. A love affair is without money.
But you probably lose a car or two?
This is what you lose sometimes. On the other hand those cars are very valuable because a car that has been featured in the film, like the car in the Quantum of Solace, we still have this car with all the damages. It is a great attraction. When we say this is the real Bond car in the film, people touch it and sit in the car. If we do an auction, it would give us much more money.
So you will probably auction it?
No. We will keep it because it is so valuable.
Profile: Extensive experience
Ulrich Bez became chairman and chief executive of Aston Martin in July 2000. He has more than 30 years of experience in the motor industry, having been involved in product design and development at Porsche, BMW and Daewoo.
Before joining Aston Martin he was a business adviser to Ford Motor Company in the United States. Born at Bad Cannstatt in Germany, Bez has a doctorate in engineering from the University of Berlin.
He is the author of more than 40 publications on subjects related to passive safety, aerodynamics, material and design.
He is a skilled test and development driver with experience in racing and sports cars. In 2007, a group of investors led by Kuwait's Investment Dar and its partner Adeem Investments acquired the majority stake in Aston Martin from Ford in a deal worth about Au500 million.
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