We interrupt normal programming to bring you a special treat…. a review of Dino Days by Phil Brigstock.
This is a whole new genre of car book – an anecdote-filled AUTO-biography. It is centred on Phill’s twice ownership of a Ferrari Dino, but covers so much more of his family’s life-long involvement in classic cars. It avoids the usual technical-fact design-detail of many single model books, and the tedious detail of I-restored-it-this-way of classic car personal accounts.
Instead Mr Brigstock takes us on a very personal driving CV. He started with a humble Ford (so many of us can relate to that), but quickly moved up to a Triumph Spitfire (related again). However, Phill just kept going. We particularly loved the stories of Lotus Esprits and the Lamborghini Miura – owned by the Brigstock brothers when most of us were still standing in WHSmiths reading Thoroughbred and Classic Cars with a longing in our hearts. The atmospheric, slightly colour-faded 1970’s photos emphasise the nostalgia for a long-gone time.
What is particularly noticeable in the book is an absence of any reference to spannering or modifications. The family were not tinkerers, and certainly it is refreshing to read that any profits were purely accidental, and certainly not the usual Wheeler Dealers type of mythical look-how-much we made on this.
Talking of Wheeler Dealers, Mike Brewer has penned the foreword to the book. All of the profits from each book are going to the Sporting Bears charity, which we strongly endorse. Sporting Bears members provide paid-for joy-rides for members of the public, with all proceeds going to benefit disabled children. Everybody wins from that. It enables regular people to experience everything from an Austin 7 to a brand new Aston Martin, boosting the image of classic car hobby. Having raised well over £2 million, this is a most commendable organisation.
You must go and buy this book! It is available on Amazon, and at good bookshops. It is a great read….. and it supports disabled children. Just how much incentive do you need? Buy it today!
Three years ago, we all believed that autonomous cars were just around the corner – and we felt that was a good thing. Retain human control for the fabled blast in the country, but let the machines take on the drudgery of commuting and long-distance motorway work – and getting us home from the pub!
We have some doubts about the direction of Aston Martin Lagonda Ltd as a company, but we respect Andy Palmer as a well-connected, senior car-industry figure. So when he says that full autonomy is a pipe-dream, we listen.
Another issue revealed to us is the autonomy “big accident” risk. When autonomous cars crash, they tend to be large ones! If humans have crashes, mostly they will realise that something has gone wrong and slam on the brakes at the last split-second. Whilst this does not prevent the crash, it does mean that some deceleration occurs before impact, and so the crash happens at much reduced speed. Typically, crashes in autonomous cars happen because of a failure to correctly interpret the surroundings of the vehicle. And thus the autonomous car hasn’t noticed anything wrong – so it ploughs into the obstruction at full speed! Ooops.
There have been two famous crashes, where Teslas have sped straight into the side of juggernauts parked across the highway. Speculation among the online community (oh dear, not the most reliable source then) is that the crashes happened because seeing a juggernaut sideways is such an unusual occurrence that the AI-developed software interprets the sight as an overpass bridge and so ignores it.
Finally, there is the fabled issue of how can one let a computer decide whether to swerve away from a man in the road, if that then endangers two children on the pavement.
However, we are not convinced that these issues will prevent autonomous cars. At its present stage of development, it appears that sensors, processing power and software are not quite there. But these are engineering problems that are easy to define and will be solved.
Computers are very good at measuring distances and heights. Therefore, interpreting a truck as a truck and not a bridge can be pre-programmed. Likewise, new types of sensors will be developed so that cars will know much better than human drivers what is going on around the vehicle. Add to that car-to-car connectivity, so that each car knows the intention of all the vehicles within half a mile, and suddenly an autonomous car is much better placed to co-ordinate its movements with those of all the surrounding cars.
We do not agree with the idea that humans are better at split-second, morally loaded decisions than computers. In a crash situation, the choices made by a driver will be essentially random, or pre-programmed by their normal reaction. Given a little forethought by the software programmers, 99.9% of situations can be managed for an optimal result rather than the vague human output.
Convoys of communicating vehicles can travel closely together, allowing for more efficient use of roads, and greater fuel efficiency.
We wonder if Mr Palmer’s reluctance over self-driving cars is that it removes a key justification for buying an Aston Martin – and that providing such systems is also beyond the capacity of a relatively tiny car company?
However, combining human drivers with convoys of autonomous vehicles could be tricky.
It is this last point which is exercising us! We believe that fully autonomous roads will happen within the next 10 years. Our worry is that will the take over of roads by autonomous vehicles mean that car enthusiasts in their old-fashioned, petrol engined “classics” are banned from going out at all eventually?
Since we yanked on the handbrake for AML shares in March, and again in May, how have things been? Initially, almost as soon as we made our most recent forecast, the pesky management went and bought a few shares for themselves, and the price rallied £2. Not the best of starts.
Since then, more teasers of the make-or-break DBX SUV have been released.
Autocar are carrying a report that the order-books are to be opened next month at Pebble Beach. Despite our view that we have seen peak SUV, the DBX fits into the mould. To be fair, it’s not as ugly as a Bentley Bentayga, nor the Rolls Cullinan. To us, it looks rather like a Porsche Cayenne with an Aston-shaped grill nailed on to the front. So it should sell well initially, though we continue to fear that sales will fall off a cliff-edge in 2 or 3 years time as EV’s take over.
And the latest news?
Talking of sales falling off a cliff-edge, yesterday it was announced that deliveries to dealers in the second quarter were down 22% in UK and 28% in EMEA. Over the twenty four hours since then, the shares have collapsed from £10 to £7, which we can disclose is a 30% fall (see, we’ve always had a natural flair for numbers).
Our view remains that at some time, the shares of this iconic brand will represent good value. But it is not yet. There remains huge delivery risk on the crucial DBX project. And just too many variables in the world luxury car market.
As before, we recommend BUY THE CARS, SELL THE SHARES. Is it time for my bonus yet? (Ed. NO!)
At the time of the Geneva show, we recommended ASTON MARTIN – BUY THE CARS, AVOID THE SHARES. We didn’t buy the shares. Sadly, we weren’t able to buy the cars either. One day, it will be time to brake (break) our recommendation, reverse our view, steer in a new direction and accelerate purchases. Okay, now with the car-puns done, as before, let’s have some pictures before getting to the boring numbers.
So to the financials.
The numbers still don’t look great, (Data from Sharecast.com) with strong growth in revenue required before a decent profit can be made. Turning the numbers around relies on the forthcoming SUV, the DBX, being introduced successfully and selling well. All the industry pointers confirm that this vehicle will sell at great speed and with good margins. However, it is being built in a new factory in Wales (not that the location is desperately relevant, I’m sure that the Welsh have produced outstanding engineering in the past, like, er…. didn’t the Sinclair C5 get built there?) Anyway, the fact is that a new factory producing a new type of car does hold some risks – just ask Elon Musk at Tesla.
Here is the share price chart….. not looking like the trend has reversed yet is it? We’ve helpfully added the point where we advised not to buy last time! How modest of us!
Where Next For the Share Price?
Reasons for Up!
Once sales of the DBX SUV fire up, revenues and profits should race away
The trend is firmly downwards – expect it be be oversold before it rebounds
First quarter results confirmed our expectations that new-model investments will eat margins for the foreseeable future
There remains huge delivery risk on the “saviour” SUV project
Market cap remains twice revenue, whereas we would expect it to be closer to a 1:1 ratio
At some point in the future, these shares will be good value. That will be when revenues have grown, new products are selling well or at least have had good launches. Right now, we expect the selling to continue until perhaps 600p.
When we consider investing in AML shares, we find ourselves shaken, not stirred! Steer clear.
We love the Aston Martin brand, so before the boring writing bit, let’s have some pictures.
The latest range are just soooooooo handsome!
The three (yes three) new models announced in Geneva are truly inspiring. Steve Cropley, writing in Autocar magazine, summed up the warm – no, radiant – response as “There’s an air of profound impatience at Aston, driven to some extent by bearish forecasts of its share price trajectory in some financial media. The will to ‘prove ‘em wrong’ is strong indeed.”
Okay, that was the fun bit. Here comes the BUT. And it’s a big BUT
The share price has not performed brilliantly since the IPO last autumn.
It was floated at £19.00. After one long skid, it closed yesterday at £11.03. That is some crash! Not helped of course by maiden results coming in at a loss.
And, frankly, though we respect CEO Andy Palmer’s team, we feel they are making two crucial mistakes;
Three new cars, each in tiny segments, feels wayyyyyy too ambitious, especially for such a small company. How can Aston Martin have the engineering resource and finances to expand so quickly – and into three new markets, none of which are huge? The car-nuts in us love the concepts, but the bean-counters see it as way too risky. Come on Aston, your bread-and-butter products are in hugely competitive arenas. You cannot afford to have your best engineers distracted by vanity projects (sorry, sounds harsh but it is true). We’d rather you focussed on making the DB11 and Vantage the best they can be, with blockbuster follow ups. And then, perhaps one new niche product? Which brings us to Lagonda………
Lagonda! Of the three new concepts, the Lagonda EV (Electric Vehicle) appeals the most as forward looking and brand enhancing. But which brand are you supporting, Aston? Lagonda means nothing to anyone under 40, and even to the grey-haired, it is nothing more than the huge, quirky William Towns designed 1970’s Sheikh-mobile. Aston Martin is a small company and should be polishing its famous brand, not trying to introduce a new one. A super-SUV type vehicle has worked well for Porsche, Bentley and even Rolls-Royce. We feel the new EV-SUV should be a halo product for Aston Martin.
In summary, Aston Martin cars are great. We love the brand. BUT, we feel the company is trying to run too fast, and we’re not sure about the Lagonda branding. Oh dear, we’re sounding like Steve Cropley’s “…some financial media.”
However, I’m sure we’re not the first to say this……..