It's not often that we get to say “we told you so” but in this case we can, as the most over-priced, under-pedigreed, silly-looking wannabee Smart we've ever sneered at takes a swan dive into extinction.
Aston Martin has abandoned its attempt to tap into the popularity of so-called ‘city cars’ after selling fewer than 150 of its Cygnet model, an embarrassing blow to the struggling 100-year-old British luxury sports car maker.
The two-door Cygnet, which started production in 2011 based on the Toyota iQ but was marketed at three times the price, has been dropped from the company's line-up after dismal sales of the £32 000 pound (R513 000) vehicle.
Aston had hoped to sell up to 4000 Cygnets a year to environmentally conscious city dwellers thought to be keen on a small, easy to park, luxury vehicle. But buyers were put off by the Cygnet's high price, particularly since it lacked the characteristic performance of a brand that achieved fame with the DB5 sports car featured in 1960s James Bond movies.
Automotive analyst Ian Fletcher commented: “The Cygnet was intended to catapult the brand into a new market, but at roughly double the price of many competing cars in that segment.”
“It was misjudged by Aston Martin.”
“The premium supermini market is a good place to be at the moment but Aston Martin got it wrong in thinking putting a grill and a fancy interior on what was basically a Toyota iQ would make people buy it.”
European carmakers have recently done well out of producing high-end micro cars. Audi's upmarket A1 supermini is selling well, while Mercedes is considering making a luxury supermini to take on BMW's successful Mini. Research consultancy IHS has estimated that nearly 600 000 city cars will be sold across Europe in 2013 and expects this to grow to about 800 000 by 2020.
However the popular BBC programme Top Gear and other car websites suggested that Aston ventured into the city car market to help it meet EU targets for fuel emissions and to justify the development of V8 and V12 engines for its high powered cars such as the DB9 and Vanquish models.
Aston Martin was not immediately available to comment.
The luxury car maker, owned by Kuwaiti and Italian private equity groups, has struggled to grow since the economic downturn in 2008. Failing to find success when the luxury sector is growing rapidly does not bode well for Aston Martin, which also lacks a luxury SUV model - excluding it from another market that has defied Europe's recession.
Its weakness has been exacerbated by a lack of funds from its private equity owners; by comparison, UK rival Jaguar Land Rover has enjoyed more than £4 billion (R64 billion) of investment since being bought in 2008 by India's deep-pocketed Tata Group.
Sales fell from 4200 in 2011 to 3800 in 2012, although the company is aiming to double volumes by 2016, helped by new versions of the Vantage and DB9 models, powered by a new generation of bespoke V8 engines developed in a joint effort with Daimler's high-performance Mercedes-AMG division.
“Their involvement is a huge positive.”
It’s hoping they will help it better compete with the likes of Volkswagen's Bentley and Porsche units, as well as Jaguar Land Rover, which has achieved strong sales growth, especially in China, since 2008. Bentley also reported a 30 percent rise in 2012 sales, helped by new showrooms and growth in the United States and particularly China, with its large number of super-rich consumers as well as a fast-growing middle class eager for luxury western items.
Fletcher said: “Italian private equity group Investindustrial turned around motorcycle maker Ducati which was in trouble and has a similar history to Aston Martin, while the Daimler relationship can only help develop the technology under the skin, which is key.”
Meanwhile Aston Martin's next challenge may be just around the corner; media reports suggest its charismatic CEO Ulrich Bez is set to step down at the end of 2013 after 13 years at the helm and with no clear successor. - Reuters