Tuesday 30 June 2009

Company Focus – Aston Martin Lagonda – Cygnet Signifies an Alternative Business Stream

The WSJ today reports that Aston Martin Lagonda and Toyota have agreed a platform/vehicle sharing arrangement with the iQ city car. 

To be known as the Cygnet under an AML marque, the strategic aim appears to enable both regulatory adherence regards CO2 emissionsf its V12 and V8 the DBS, DB9 and V8 Vantage & Volante supercars and provide reach into affluent yet congested and increasingly restricted global city-centres.

Of course initial reaction to the idea of a Aston badge adorning the front and rear of an iQ is “shock-horror”, but of course there will be far more rational and detail behind the initiative. As the economic slow-down bites into conventional business at Gaydon and capacity & revenue sharply, Ulrich Bez et al will deploy a plan of action designed to battle the historic norm of AML's generational demise as the supercar business-cycle sweeps into a trough.  

It is generally recognised that unlike the Aston brand, the revived Lagonda marque is not “set in stone” by the public's perception. (Indeed its periodic re-emergence has been a both svelte AM saloon body variants in the '80s and previously the then shocking 1970s Townsend designed angular vehicle. It's original 1920s and 30s guise is lost to most except marque connoisseurs). Hence it's re-invention can be made theoretically from a blank canvas, and that it exactly what AML did with the Lagonda concept X-over vehicle at Geneva 09.

That car was used to demonstrate a new forward looking era for the revived marque, one which rode the X-over trend by marrying the DNA of a Porsche Cayenne, Range Rover and Bentley, The remit to produce something alternative for the uber-luxury set of target clienteleee that span the globe and have outer-city homes; from contemporary weekend beach-side houses in The Hamptons to luxury weekend Khaymas (tents) in thdesert-landsds of the Arabic Gulf - in indeed both! This select latter group could well apply to the part-owners of AML: the Adeem investment consortium.

So whilst the Geneva car presented something of the alternative new Lagonda, the story appears not to end there. There was mention of a sedan vehicle, which given that the X-over is based on a Mercedes GL platform would suggest that a sedan would be evolved from an S-Class or E-Class base, cementing a Daimler inter-relationship which also offers new 'eco-tech' solutions (such as L-ion hybrids) and critically would also strengthen the inter-relationship of GCC SWF and PE funds given Adeem's AML interests and Abu Dhabi's $2.7bn Aabar Investment Fund buy-in to Daimler in March along with (and slightly diluting) the the Kuwait Investment Authority holding. 

As we see today, the reports of the AML-Toyota city car alliance alters partially 'given' perceptions that the other AML cars would be born from Daimler given Stuttgart's willingness to seek alliances. (ie suggested Daimler-BMW small car). However it seems that the the A-B class platform and Smart Car base were either not put on the table for debate - perhaps Daimler demanding retained sole usage - or the limited ability to alter the A-class and Smart's aesthetic to suit another brand's design cues with in the latter's case the added disadvantage of sub-optimal NVH (noise, vibration, harshness) driving characteristics.

So AML it seems needed another borrowed platform to provide credibility to inhabit the premium city-car segment. So providing an urban-focused radically different counterpoint product to the previously displayed X-over. One that not only fitted the luxury city-car genre, but also by establishing a second stake in the ground so far away from the original indicated the potential stretch & span (ie market segment coverage) of the Lagonda brand. 

Now the Lagonda Wings are truly stretched!

But investment-auto-motives suspects that AML has also taken on this 2nd strategic partner to enable dual access possibilities to eco-tech powertrains from Daimler & Lexus for fitment to next generation supercars such as the successor to the soon to arrive Aston Rapide and a probable sister Lagonda variant. And increasingly beyond the 30mph/50kph + speed limits of suburban roads and motorways / freeways / autobahns, Lagondas will have to operate inside city-centre LEV and ZEV environs (from London to Singapore) that will demand alternative propulsion solutions.

Lagonda has the task of creating an identity from scratch his purports that the Lagonda marque will offer an alternative driving and passenger experience. To do this it appears to be rightly looking across the spectrum and history of personal travel. Remember the word sedan in auto-terms originates from the sedan chair, of which there was even a Lagonda names version. 

However, crucially the marque's name is actually a transmogrification, derived from 17th century wealthy Venetian's calling for “La Gondolier” for canal-way carriage .

Furthermore, Lagonda was once synonymous with the forerunners of today's powerboats, the V12 car engines used for propulsion and that water-land connection promoted numerous wooden-body and boat-tailed vehicle creations. 

And the so choice of the Cygnet moniker conjures up the quiet British riverside, the near silent wafting of rowed and sailed leisure craft and connection to the brand's 'waterland' origins - a happy picture to 'paint' to influential - yet given these tough times - jittery investors.

So it seems AML, Dr Bez & Adeem are indeed, through the Cygnet initiative, following that change in social & business tidal flow - using high-quality, visionary external business partners exemplifed by Daimler and now Toyota. This exercise demonstrates their "(signet) ring of confidence", and will (intendendly) be the talk of the Henley Royal Regatta this weekend.