Ford Without Aston: Smart Move
The news this morning of Ford selling it's Aston Martin luxury auto linebrings to the end a 20 year run where Ford tried to make a high-end niche brand work for the world's third largest automaker. While Aston Martin has been a profitable operation, it has never been a good fit - for either Ford or Aston Martin. When Ford took it's initial stake in Aston Martin in 1984, then bought it outright in the mid 90's, the idea was to fold in an upper end brand and the profits it generates. Ford partnered Aston martin with Jaguar, Land Rover, and Volvo to form it's Premier Auto Group. Then CEO Jacques Nasser envisioned the group as an umbrella of luxury autos that would let Ford capture the lucrative profits of the growing upper auto market.
But PAG has never delivered what Nasser and the Ford board envisioned. Jaguar initially surged when Ford rolled out the X-type, only to later suffer sales as people complained that Ford had cheapened the brand with the entry level X-type. Land Rover has failed to consistently bring in sales in part because it's been slow to roll out new models. Volvo has clearly been the best performing member of the PAG. But that one brand is not enough to offset the inconsistencies of PAG as a whole.
That's why selling Aston Martin makes sense for Ford. Not only will the company bring in $848 million, which is money it certainly could use after losing more than $12 billion last year. But more importantly, it is a small, but significant step allowing Ford to focus on it's core brands. That's not to blame the ownership of these luxury brands as the reason Ford has lost it's way. That is a result of Ford being unprepared in the last 6 years for the shift from trucks and SUVs to cars and crossover utility vehicles.
As for Aston Martin, being bought by a group led by racing entrepreneur David Richards should help the brand. He runs the Aston Martin racing team and he knows what Aston is all about both terms of performance and style. This is a niche brand selling cars that cost over $100,000. It will thrive under an ownership group ready to spend the money and time to keep Aston an elite brand. As one auto insider told me last week at the Geneva Auto Show, Aston will thrive with a owners who treat it as the start attraction and not just another brand in a portfolio.