It is hard to believe but it is true that companies that are more than century old can also be in crises. Things can go wrong at any time with any company. Not to mention, when there is a big recession in the economy of the world, virtually no business is safe. We have seen banks merging and companies vanishing just a little less than 10 years ago when there came a huge recession in the economy of the world. Among many companies, we have Aston Martin, a company that makes luxury sports cars that has been in crisis for years now.
You can’t take a company like Aston Martin for granted. They have produced some great cars and they have been around for longer than most of the old people around you. The company has been around since 1913, which makes it 102 years old. Aston Martin has been known around the world for the use of its vehicles in one of the most famous movie series around the world – James Bond. Aston Martin has never been the company with a constant rise in its profits. In fact, the company has always been going through good and bad times.
Currently, Aston Martin is in not a very good condition. Blame it on their bad marketing or just lack of understanding of the modern designs, they are not selling their vehicles as they would like to. They have been going through a long period of decline in sales and consequently profit. According to the reports quoting the statistics of profits and loss for the company for year 2014, it had to face a loss of triple the magnitude than its previous loss. This marks the fourth year on the calendar for the company with absolutely no profit.
Just in 2013 there was a loss of 25.4 million pounds for the company. This was already a great loss for the company that is looking toward taking steps for expansion and more acceptability in the modern automotive market. However, things have become worse in 2014. The losses have tripled for the company and in in 2014 the company had to bear a loss of 71.8 million pounds. If we calculate that in dollars it comes to around $100.9 million. Andy Palmer, the CEO of the company in the crisis, does not have any good news about the company yet.
According to him, Aston Martin will continue to see a drop in its sales and a decline in its profit until 2017. The reason for this decline in profit is not just the decline in sales. Another reason behind the financial fiasco is company’s new steps towards expansion. The company now wants to offer more vehicles than it has ever offered by including an SUV in its lineup. This SUV will be a crossover and definitely the company will be depending on this vehicle a lot to get back on track and start earning some profit to move on.
Aston Martin is known for its luxury sports cars but it seems that its customers are not interested in luxury anymore, or they are not liking the way the company is offering the luxury. The sales have been declining for the luxury sports vehicles from Aston Martin. When we look at company’s performance in selling luxury sports cars, it sold a total of 4200 cars in 2013. However, a year later in 2014, the sales went down even more when the company managed to sell only 3661 cars in 2014. The total decline in revenue reached 10 percent for the company.
The decline of sales of company’s vehicle has taken place significantly in China. Of course, when companies see that their profits are going down they have to take measures to reduce their costs. The easiest way to reduce the costs is to get rid of the employees. That’s what Aston Martin is about to do now. The company is going to get rid of a huge number of employees in the coming months. According to some statement the company might lay off 15% of the employees working for it right now. The jobs cuts have been called meaningful by company’s officials.
The production staff of the company can rest assured that the officials have said that they will not fire any production staff. The people working in offices should definitely be concerned about their jobs now. The total workforce that makes the company run is 2100. The company is currently looking to have a new plant to build more vehicles. However, the site of construction has not been decided yet. This new plant and the production of the new crossover SUV resulted in Aston Martin collecting money from the shareholders. Major groups that bought the shares were from Kuwait and Italy.
According to the latest figures, the company will easily get rid of 300 people from its offices. We must not forget that the company has no other options left right now but to get rid of its hard working employees. The sales are dropping on one hand, on the other hand, there are several recalls that the company has to face. From the current statements given by Palmer, the new CEO, it seems that he is ready to do anything possible to make the company stand on its feet again. According to Palmer, the company should target female customers now.
It is important for Aston Martin to realize the importance of marketing, now that it is looking at sending a fresh wave through the lineup of its vehicles. Palmer wants the company to come up with some new models. Lagonda will finally be updated with a new model. DBX will be the electric car from the company and also a 4-wheel drive vehicle. Mr. Palmer said that out of the total 70,000 vehicles that the company has sold in more than 100 years, only 3500 were sold to women. From the talks of Palmer it seems that he wants to give a new vision and mission to the company.