Classic British marque driven to globalisation
By John Reed
Published: May 2 2008 20:50 | Last updated: May 2 2008 20:50
For all the bling of the new DBS – complete with flashing “power”, “beauty” and “soul” lights on the dashboard – Aston Martin is still a quintessentially British sports car, just with a modern twist.

The cars are designed in an eco-friendly new wood-and-glass studio in Gaydon, Warwickshire. And an adjacent factory builds them using craftsman-like touches like hand-stitched upholstery and a seven-coat, 50-hour painting and polishing process.

The DBS – the brand’s highest-priced “halo” car with a list price of £160,000 – will appear in the next Bond film, Quantum of Solace, the tenth car to do so in Aston Martin’s 44-year-old product placement relationship with the spy film franchise. Like most other carmakers, however, this emphatically British brand is a showpiece of globalisation.

Its cars’ huge eight and 12-cylinder engines come from a plant in Germany owned by Ford Motor and supplied under a rolling five-year contract agreed last year when the lossmaking US carmaker sold it to Kuwaiti investors.

It uses parts from as far afield as the US and Japan. The seat leather for the V8 Vantage comes from Scandinavian cows kept in fields too cold for mosquitoes and free of electric fencing that might damage their hides.

Aston’s boss is Ulrich Bez, a 64-year-old German who commutes home to Düsseldorf on weekends, speaks in rapid, accented English, and makes no bones about scouring the globe to find the best materials. “People in England expect to get something that is the best of British, and not something that is made in England and maybe second class,” he says.

England produces no “proper tyres”, he says, much less the microchips used in the electronic control units that guide everything from the cars’ suspension to their brakes. “What is England is here in the head,” he says, pointing to his temple.

In fact, Mr Bez – known to Aston’s 1,800-strong workforce by the honorific ‘Doctor’ Bez (pronounced bets), promotes a vision of a virtual car company of the future that keeps the high-value functions like design and branding in-house, but outsources everything else, down to the production of cars.

In March, Aston said it was outsourcing production of its upcoming four-door Rapide model to contract manufacturer Magna Steyr, which will build the car at a new dedicated plant in Graz, Austria.

Even as Mr Bez sends some carmaking capacity abroad, he is “insourcing” functions like engineering. He started under Ford Motor in 2000 with 30 engineers, and now has about 300.

Carmakers in the future will be even leaner, he says, concentrating on the “intellectual part” of the business and sending more of the heavy lifting out of house. “Nobody who looks at a Norman Foster building somewhere will look if the steel and glass come from England,” he says. “Everybody will look at [whether] this is a Norman Foster design.”

Aston Martin’s boss can afford to think big. The brand does not report financial results, but describes 2007 as its best year ever, and says it produced 7,300 cars and is profitable.

The high-luxury carmaking segment where it sits, alongside brands such as Bentley and Ferrari, is enjoying record sales and strong pricing power despite the global credit crunch.

Over the past two months Aston has added dealers in Beijing and Shanghai, and will launch another 10 to 15 around the world this year that should be selling 50 to 100 cars each by 2010.

Aston’s rude health could bode well for Jaguar and Land Rover, which Ford is selling to India’s Tata Motors, and whose headquarters are also in Gaydon.

When Ford sold Aston to a consortium headed by Prodrive chairman Dave Richards and financed by Kuwait’s Investment Dar and Adeem Investment, some analysts predicted it might founder under new non-European owners outside the fold of a bigger carmaker to pool research and development and other costs. Similar worries have been voiced about Jaguar and Land Rover.

Aston – like Jaguar and Land Rover – does in fact face a significant obstacle on the road ahead in the form of pending European Union legislation that will force carmakers to slash their average carbon dioxide emissions or pay heavy penalties.

With the fine points of the new legislation still awaiting approval and Aston’s cars selling for between about £80,000 and £160,000 apiece, the brand will probably be able to pass on some of the costs of investment in new technology – and potential CO2-related penalties – to its wealthy customers.

However, Chas Hallett, editor of Autocar magazine, says of Aston: “They can’t afford to be seen doing nothing.” He adds: “They are successful, but will need a major investment in the next generation of models.”

Unlike Bentley and Rolls- Royce, which have outlined concrete strategies to cut their cars’ CO2 emissions, Aston Martin gives few details of its future plans. Unusually for a carmaking head, Mr Bez is openly sceptical about some policymakers’ motives in their push to cut emissions.

Aston Martin, like Britain’s other high-end, low-volume carmakers, hopes to profit from a proposed exemption for low-volume luxury carmakers. Britain is arguing for the loophole, but some other less profitable volume carmakers oppose it.

Aston Martin is still planning to work with other manufacturers on emissions-cutting technology. But Mr Bez says he is in no rush: “We are talking about 2050 plans.”

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