Aston Martin SWOT and PESTLE Analysis

Strength

1. Strong global brand and sales power: Aston Martin Lagonda Global Holdings plc was named as the fastest growing auto brand globally by Brand Finance in 2018. The company has been able to attract 48% of new customers, 20% of the former customers and 32% of existing customers who repurchased Aston Martin during the year 2018. The company has been following the “Second Century Plan” which is aimed at enhancing its ability to enter new markets and achieve greater market share in the existing markets. The company commands a strong pricing power because of its ability to increase average selling price of core models through introduction of new core models and enhanced versions of the existing models. The company maintains an optimal balance between supply and demand through targeted multi-model, dual brand strategy, to maintain the exclusivity and desirability of its cars. The exclusive nature of the special edition cars allows them to command a superior price. For instance, the company has introduced four special edition cars using the Zagato nameplate, based on the Vanquish Model Platform, each of which were priced higher than £ 500,000. The company focuses strongly on building an emotional connect with the customers and to ensure a unique luxury customer experience, through personalization, customization, exclusive offers and customer engagement activities. The results of this approach can be seen through its strong customer base.

2. World-class design and engineering topped with stellar execution: The engineering and design team work collaboratively to ensure that every model combine best of design as well as performance. The company follows principles of quality, lean and efficient teamwork and craftsmanship with a focus on safe working environment and robust processes. The British car maker boasts of industry-leading, passionate team with strategic vision and execution track record. The company successfully delivered five models, namely, the new Vantage, DBS Superleggera and special editions of the Vanquish Zagato Speedster, Vanquish Zagato Shooting brake and DB4 GT continuation, during the year 2018. This operational performance can be attributed to “Hoshin Kanri” methodology, as defined in the company reports, which ensures that management’s strategy is deployed in daily actions at the working level while making sure that employees are aware of their contribution to the overall plan. It uses a flexible modular architecture for over 14 years which provides them flexibility and minimizes investment on tooling and engineering and improves the quality time to market the product. The company also possesses high level of in-house powertrain expertise, in both conventional internal combustion engine and next gen electric drivetrains. This expertise helps them analyze the relative operational and financial merit of buying the engines or building them in-house. These experts are also on the look-out for new developments in the hybridization technology through a combination of electrified transmission and waste heat recovery.

3. Innovative Technological Features: The company invests on research and development heavily to deliver next generation model evolving with tastes, styles and demands of customers while maintaining design elements that historically defined Aston Martin or Lagonda. All the models are crafted to reflect the “golden ratio” to create cars with timeless aesthetics. Their design team, located in Gaydon, UK and a new facility in Milton Keynes, consists of 1065 designers, engineers and modelers including electronic modelers and other skilled craftsman. Due to the presence of a team of experts the company has been able to develop products wherein the customers can enjoy a degree of customization within the base car and choose from the different interior and exterior options. Q by Aston Martin, a unique personalization service, enables customers to create a truly unique car. The company had dedicated its research and development team to develop a hybrid car technology sensing the shift of the industry towards electric technology. The company launched its first Electric Future event in June, 2019. It unveiled its first electric sports car, Rapide E and it’s all electric Lagonda Vision concept. Rapide E features twin electric motor that has an ability to of reaching 0-60mph in less than four seconds. It has now set an ambitious target to become the world’s first luxury electric brand.

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Weakness

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Opportunity

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Threat

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Political

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Economic

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Social

1. Shifting consumer preferences and increasing disposable incomes: An increase in the number of luxury vehicle offerings, increase in disposable income, shifting consumer preferences from sedan to SUVs have been fuelling demand of luxury cars. In terms of vehicle type, SUVs contributed more towards the growth in the global luxury vehicle market and the average growth rate has been observed to be 14% over the last 5 years. Super sports car, usually cost for over $150,000 and are also expected to witness a high growth rate, even if they occupied only 1% of the market share in 2016. Although factors like increase in import tariff are expected to hamper the growth of the luxury car market. For instance, the US government may increase import tariffs on German cars, and German manufacturers like BMW may have to face an increase of up to 35% import duty on cars not manufactured in the US. Aston Martin Lagonda being a UK based company may also be subject similar increase in import tariffs which may lead to an erosion of profitability and/or increase in overall price of the product which may have unknown repercussions on the consumer demand.

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Technological

1. Growing interest in alternative fuels and move towards electrification: Greener Future has been a focal point for policy makers as well as auto manufacturers and consumers are increasingly weighing fuel efficiency and carbon footprint as one of the top considerations while purchasing cars. After an analysis of 4-year trend, it has been observed that the interest in gasoline vehicles has been gradually declining, this can be seen by a 5% decline has been recorded between 2015 and 2018. Unlike gasoline, other fuel types have reported a double-digit increase. Hybrid vehicles are currently the top alternative fuel type that the consumers have adopted however, an increasing shift towards vehicle has been observed which reported a 15 times growth in 2018. The gas shopper segment, which is nearly 38%, are nearly two times likely to cross shop a hybrid over electric vehicle and 3 times more likely to shop hybrid over plug-in hybrid vehicle. Looking at a 5-year trend, an increasing shift in interest towards progressive technologies is expected. Approximately, 46% users are starting with electric/hybrid category in mind, which indicates that they are interested in alternative fuel vehicle right from the start. The company had dedicated its research and development team to develop a hybrid car technology sensing the shift of the industry towards electric technology. Aston Martin Lagonda has launched its first Electric Future event in June, 2019. It unveiled its first electric sports car, Rapide E and it’s all electric Lagonda Vision concept. Rapide E features twin electric motor that has an ability to reach 0-60mph in less than four seconds.

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Legal

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Environmental

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