#18 - Hot Shots! Part Deux
“Copying is the highest form of flattery” my mother use to say. If I’m honest, I have always taken the view that copying is the highest form of laziness. After all, it’s much easier to jump on the band wagon when you have seen a proven concept working than it is to have a go at building something from scratch when no one has done so before you. The sad fact is though, in today’s world, copying is deemed an extremely viable business proposition. If the market is big enough to absorb the increased supply without too much detriment to price and more importantly margin, crack on…….at least that appears to be the modus operandi in the automotive world at the moment.
McLaren have for a while now been bombarded with negative press surrounding their insatiable appetite to create more and more special cars. In fact back in June, we were very much throwing fuel on the fire in our musings “Too Much of a Good Thing” albeit coming from a more constructive angle and highlighting the positives to come from their ability to make so many incredible cars in such close succession. The reality is though, this theme is going to become more and more prevalent over the next couple of years as global growth treads water and car manufacturers desperately try to appease shareholders…..and there are definitely winners and losers.
This month has seen some interesting cars released across the spectrum. McLaren gave us a roofless Senna called the Elva to take on the Ferrari Monza SP2, Ferrari showcased the Roma to take on the Bentley Continental and Aston Martin DB11 and Aston Martin updated us on the DBX…..a car that is entering the most competitive sub division of the car market at the moment and whose success is crucial to keeping the company afloat.
So to the Elva, a predictable yet fitting end to the trilogy of McLaren Ultimate series cars to be produced over the last couple of years. Its timing also somewhat pertinent as its launch beautifully coincides with the first deliveries of the Monza taking place to a handful of lucky Ferrari customers. With only 399 Elva’s being produced at a price of £1.425mm each, its impact on the market will actually be very muted. In a similar vein to the Monza, the Elva will be offered to McLaren’s most valued customers who are likely to already have a Senna and/or Speedtail in their garage. Residual values of the Senna had already taken a hit prior to the announcement of the Elva and I don’t think we see any further weakness in them. To be honest, given the very different driving purposes of Senna, Speedtail and Elva, the product differentiation alone should actually allow us to see a bounce back in Senna prices over the next 6 months-1 year.
Now lets talk La Nuova Dolce Vita….the Ferrari Roma. In their minds an everyday drivers car to take on the likes of the Bentley Conti GT and Aston DB11, I can’t help but thinking Ferrari are starting to get a little desperate. Not only did the arrival of the 488 replacement, the F8 Tributo, come around a lot quicker than most expected (or needed), but I have never looked at their current range and thought “they are missing a trick in the usable/practical Ferrari department”……they have the GTC4Lusso T and the Portofino let’s not forget. Don’t get me wrong, the Roma looks infinitely more interesting than the Conti or the DB11 if you need a car to do 200mph with your golf clubs in the back, but if this was a real world headache for me, I would probably already own the Lusso. So what Ferrari are really doing is diluting their own market share…..put simply, I don’t see the point of the Roma.
Finally the Aston Martin DBX. I actually think this is the saddest tale of the lot as I truly love everything Aston stands for as a car manufacturer. But alas, I think a case of keeping up with the Jones’s has meant they have inadvertently shot themselves in the foot. The Bentley Bentayga has been around since 2016, the Lamborghini Urus since 2017, the Porsche Cayenne since 2003. Unless Aston are coming with a comprehensively superior product offering for this segment of the market (they’re not) or the DBX is coming at a heavily discounted price (it isn’t)…….they are dead in the water. Yes its being built at the brand new, state of the art St Athan’s facility and yes many millions of pounds have been spent developing it but linking the future of the company to a very average product offering is borderline idiotic. The new Vantage is getting destroyed by the likes of Porsche 992 and sadly the story of the DBX is likely to be much the same.
So who are the real beneficiaries of all this copycat nonsense? I would like to say the car buying population but honestly I think that’s a stretch. More options to choose from is meant to be a good thing but I can’t help but thinking that we have reached a point in the automotive cycle where too much is actually a bad thing. Consumers become so bewildered by the choices available to them they have purchasing paralysis. For the car makers, it just appears like a race to the bottom. They are fighting for minuscule margins of market share which is ultimately resulting in margins getting crushed. A huge topline figure is irrelevant when your EBITDA is declining. So what happens in the end becomes a survival of the fittest for the manufactures. And that sadly means the demise of Aston Martin in my eyes. They just can’t keep up with the rest of the market.
Happy Motoring,
Greg