Aston Martin CEO Andy Palmer talks to us about luxury, beauty, and the ability to communicate
When Confucius decreed, “Everything has beauty, but not everyone sees it,” Aston Martin wasn’t even close to being a twinkle in anyone’s eye. Were he to reappear at this moment in time and be presented with a catalog of the most rare and exclusive vehicles in the world, he might be tempted to change his mind.
For 106 years, Aston Martin has crafted some of the most memorable, emotionally affecting vehicles in automotive history. As the company moved into its second century, Andrew Charles “Andy” Palmer, CMG, FIMechE, took the wheel, and he’s driving the luxury brand into its future.
There have been well publicized bumps in the road, such as a disappointing IPO and expansion plans that have been somewhat muddied by Brexit, but none of that can ding the company’s reputation for creating gorgeous vehicles.
“The plan that we put together back in 2015 was to basically make Aston into a profitable and sustainable business. I guess we came at it wrong depending on your point of view,” he admitted, unfazed.
In describing the essential attributes of the brand, Palmer presented the core values in triangular terms. “We're a car company, but we're also a technology company, and some of the technology we're really quite good at is low weight and – aerodynamics, I guess you'd say — and some of the ways we discharge that capability is through the way we build our cars. For example, all of our cars are glued together, for want of a better word.
“The third triangle point is one of luxury. Obviously, we're not really in the business of just selling and producing cars because our cars sit at the very top of the industry in terms of price and exclusivity, and there's no pure logic for buying one of them. It's very much an emotional appeal.
“So we have these three points on the triangle, and overall the point at the top of the triangle is this desire to behave and be seen as a luxury company focusing on exclusivity and scarcity rather than simply chasing volumes and discounting, which is of course what the mainstream industry does in downturns.”
That’s not the Aston Martin way. “We did an early study looking at the market, and perhaps one of the most interesting markets is the growth of high net worth individuals. They’re growing CAGR of around 6 percent per annum through 2025, and those people are demanding something different of the things that they buy.
“What we offer is both cars and outstanding British craftsmanship, and we see the luxury market continuing to grow in important regions like the US, China, and Japan, which are areas at the forefront of luxury spending. It's the fastest-growing market when you look at it through that particular lens,” he posited.
“You can see some of the successes of the last five years within our results in all those key regions. Looking only at wholesale as a proxy for sales in the first part of this year, we saw America growing by 38 percent year on year, to APAC, which includes China, growing by 44 percent year on year. So if you want proof of an interesting strategy to stick to in that rare and scarce world, you can look at those numbers.”
In what might seem a departure from the sleek GT racers and sports cars the firm is famous for, in December of this year, the company opened a manufacturing plant in St. Athan in The Vale of Glamorgan, South Wales, to produce its first SUV, the DBX. Engineering on Aston’s first 100 percent battery powered SUV under the Lagonda brand is also underway.
“We looked at the high-net-worth market and plotted, as the proxy, all the people and their buying behavior on a matrix, looking particularly at the focus of the car versus its versatility,” he explained. “If you've got a car which is not so focused and very much based around versatility, you look at the luxury SUV market. If you looked at something that's very focused and perhaps not very versatile, you would end up with one of the mid-engine sports cars.
“We looked at that entire space, and we found about 50 proxy customers that covered that space. We then clustered them together looking at market size and found that there were seven compelling customer clusters; you can imagine putting a car within that cluster and basically finding a reasonable volume, and that's what sits behind the seven car plan part of our second century plan because there are seven different clusters and seven different kinds of customers.
“Over seven years we are producing seven cars, one for each of those clusters. We’ve done three: DB11, Vantage, DBS Superleggera, and we are just about to launch the fourth — the DBX, which is defined today by the Lamborghini Urus, the Bentley Bentayga, and in some respects by the Rolls Royce Cullinan. That's the reason for getting into DBX. As you go exploring further you find a space which is the traditional domain of Rolls-Royce and Bentley, and in order to be disruptive in that space and to also meet our obligations towards CO2, we redefined the Lagonda brand as 100 percent battery powered. It’s that math that is key to finding the cars that we are developing.”
A different strand of the aforementioned seven-year plan is the collaboration between Aston Martin and British legacy motorcycle brand Brough Superior, aimed at pleasing an even narrower niche of customers.
“What we’re trying to do is stretch Aston Martin into other domains, and the Brough motorcycle patches onto parts of that expansion. It's both a vehicle — and clearly there are wealthy customers that would like to ride a motorcycle — and it's also part of the brand expansion. When we do brand expansions we always do them with a partner. That's what you see in us choosing a company like Brough; obviously it's a very, very old name, and we have the privilege of being able to design a motorcycle with them. They're going to now build a motorcycle that wears the Aston Martin wings and be distributed through the Brough network.”
Aston’s focus on the exclusive and uncommon is key to the company’s brand image, and throughout their history they have communicated that brand successfully across a range of global cultures. Said Palmer, “Brand is everything. That's clear. Our brand is very well defined in the UK market because we've been here for 106 years. Part of the challenge is making sure that our brand definition is current, and relevant, and working out how to communicate that to a new set of customers, for example, Chinese.
“We look long and hard at what we consider the brand of Aston to be, and could have said, ‘Well, it's GT Sport.’ But that would have very much limited what we could do. Rather, we looked at the way we design our cars, and if you look down through history the one consistent point about Aston is that they've always been extraordinarily beautiful. That's the brand DNA we want to stick with. Our particular positioning of our cars and our communication of what beauty stands for is all about the love of beautiful.”
The brand is closely linked to the golden ratio and DaVinci’s Vitruvian man. “Broadly speaking, the 1/3, 2/3 aspect ratio is used throughout our cars. That's what the human brain reads as beautiful because those are the proportions of nature. We communicate on the back of that, and define the brand as aspiring to create the most beautiful cars in the world.
“You have to remain true to something with a brand. I think we’re one of the only car companies who have their head of design on the board of directors. In our case, Marek Reichman, an Executive Vice President, is in that role. We put in a very, very high-level absolute rule that we have to strive for beauty and compromise for anything else,” Palmer deigned. “It's interesting when you look at the DBX, which is basically an SUV normally defined as a box because that's the most efficient space in which to store stuff. Obviously, you wouldn't build a box, but I’ve challenged Marek and his team around creating a beautiful SUV. When you do that you end up making compromises on some of the other stuff, but overwhelmingly what you're left with is, I hope, the most beautiful SUV in the world.”
The ever-present query, even for those who merely link the Aston Martin image to a certain suave British spy, is how the Aston Martin brand has impacted modern automotive culture. “We can't underestimate the value of James Bond over the years,” he admitted. “If you were to do a market analysis of Aston in China and start at the very top of the purchasing funnel and say, ‘Have you heard of Aston Martin?’ the answer is inevitably 97, 98, 99 percent yes, and quite often because of our association with James Bond. It’s not and can’t be our only communication tool, so we are also present in other movies. We have a presence in four movies being released in 2020 with a point of principle that we never pay for placement. That’s a very important principle.
“You also see us explaining the brand through racing. In particular, the expression of the brand through racing allows us in particular to show our technology credentials as one of the other points on the triangle of brand definition. A car is a car, right? One has to look at persuasive ways in communicating the brand, and doing so in a worldwide manner. Racing and films are some very important parts of our armory in that respect.”
Rarity as the Secret of Luxury
In part, Palmer credits the legacy of the brand to the fact that the company’s vehicles are extremely rare. “We’ve never made very many cars, so we have that exclusivity with a relative shortage of cars sold. I think in 106 years we’ve sold about 85,000 cars in total. That's the level of Toyota in two or three days isn't it? Our cars are first and foremost very rare, and fortunately with very few exceptions, when you look back at the history of the portfolio, they’ve all been what people would describe as very beautiful.
“The point about beauty in its authenticity is a key part of that rarity and exclusivity. When you put those two together, we sit in a rather nice position where there aren’t very many other players in that market, only six, and we continue to think that that's a really good place to be.”
For Palmer, another very fine place to be is at the start of a budding career in the industry. One of his charitable endeavors, the Palmer Foundation, seeks to bring a fresh crop of young engineers to the craft. It holds a place dear to his heart. “I got out of high school at 15 and started as an apprentice when I was 16, and I was lucky enough to go into what was a relatively healthy British car industry at the time,” he recalled.
“I was fortunate to be trained in that industry and it's provided me a job for the last 40 years. As I came more towards the sunset of my career, I felt it was important to give something back to a career that's been very good to me, but I wanted it to do some good in the world.”
The Palmer Foundation exists to help underprivileged teens by providing invaluable career coaching that is often unavailable to them. “In the first place the Palmer Foundation is about finding those kids that have a bias towards STEM subjects (science, technology, engineering, and mathematics) and coaching them to be able to express themselves. When they leave school at 16, the idea is that the Palmer Foundation will essentially fund their apprenticeships for about two years before placing them into a formal position within the industry. Hopefully after that two years they no longer have a deficit because of their backgrounds. We’re bringing kids in that normally wouldn’t have that opportunity, and the hope is to keep them off the streets, out of gangs, and out of homelessness.”
Not surprisingly, Palmer can trace his current presence on the global stage back to his days as a fresh kid learning the ropes, when all he wanted to do was run a car company. Today he doesn’t simply do that, he runs an iconic brand with legs that may easily run through their second century, and far into a third that exists in the rarest of dreams. That being said, he is powered by the lessons of his early days that will stand any firm in good stead.
“An apprenticeship starts you from the very at the bottom of the organization so you’re working on the shop floor learning your way around the basics. You’re learning how to mill, turn, fit, and other basic trades of an engineer, not from an academic perspective, but actually learning how to make stuff. That’s always been powerful from my point of view because I did my university education later, and that allowed me to bring the practical and academia together. But you know what? I don’t think that’s the most important point,” he mused.
“The most important thing is when you’re working on the shop floor from the age of 16 you interact with everybody in the company and learn how to communicate with people at all levels. That’s probably the single most important skill I learned — to touch the organization at all levels and make my message resonate at all levels and not just to senior management.” Beautifully said, as well it should be.
Aston Martin Lagonda is the world’s only independent luxury car group with more than 100 years of design and automotive excellence across two brands. We strive to be the great British car company that creates the most beautiful and accomplished automotive art in the world.