The automotive industry has been slowing down in the past two years. Apart from a few exceptions, most car manufacturers struggled to reach the sales number of the previous years as emerging markets saturated. The luxury segment represents one of these exceptions. It mostly maintained its momentum, as showed in the analysis of the virus outbreak effect on the industry.
The pandemic though hit some companies in the luxury niche very hard, especially in the UK. British automakers Aston Martin, McLaren, and partially Bentley, which were going through a restructuring, have been forced to cut large shares of their workforce. They laid off 500, 1200, and 1000 employees respectively out of their total of 2600, 4000, and 4200. This decision should allow them to increase efficiency as production moves gradually back to regular rhythms.
With the core business lagging, it is interesting to look at which diversification strategies these companies are adopting. Which partnerships and products they are choosing to complement their automotive business and improve their brand awareness.
The most surprising in this respect is arguably Aston Martin Lagonda.
The British automaker headquartered in Gaydon, despite the difficulties experienced in 2019 and exacerbated by the pandemic aftermath, has still one of the strongest brands in the automotive industry. Luxury car owners marked on a scale from 1 to 10 the importance of the vehicle brand in their ownership experience, and Aston Martin scores the second-highest mark with an average of 8.1, just 0.1 behind Ferrari marked first.
That is certainly thanks to its long history and some unique marketing opportunities such as the presence as the feature car brand in the 007 movies franchise. But Aston Martin is also one of the most diversified luxury automotive companies out there, with numerous side projects and concepts that bear its name.
One obvious choice, especially in this period of lockdown and slow recovery, has been to form its official E-sports team and take part in sim-racing competitions that got great attention lately. So, what else is there?
As of now, the most relevant is arguably the increasing involvement in the Formula 1 world. Despite being very much related to the Aston Martin racing division, it is still a noteworthy development. Aston Martin in fact took part in the Formula 1 championship in 1960 last time. In 2018 it established a sponsor partnership with Red Bull Racing. From said partnership, and the collaboration with F1 star engineer Adrian Newey came out the crucial future generation of mid-engined cars which stole the Geneva Motor Show. The super-limited Valkyrie, the upcoming V6 hybrid Valhalla and the concept for the 2022 Vanquish Vision. Moreover, after entrepreneur Lawrence Stroll acquired a majority stake in the company it has been confirmed that from 2021 the current team Racing Point will be renamed Aston Martin marking the company’s true return to the sport.
Far from the automotive business instead is the 66-storey luxury residence being developed with the American Real Estate developer G&G Business Development.
The tower is being built in 300 Biscayne Boulevard Way in downtown Miami and it will be a way to translate the core values of luxury, comfort, and design from the automotive world into the home-living one.
As for lifestyle products for enthusiasts, as it happens more and more frequently with brands in this segment Aston Martin released a high-quality clothing line with Hackett London. Another partnership common among luxury manufacturers is to produce watches. Aston Martin partnered with the Swiss luxury watchmaker TAG Heuer which has had a long involvement in motorsport and Formula 1 in particular.
Finally, there has been also a limited-edition bicycle. Only 107 units have been produced of the Storck Fascenario.3 Aston Martin Edition bicycle which was sold for around £15,000. As for other ventures, this bike reflects the brand’s search for luxury, design beauty, and material research. Storck, in fact, built it entirely using Nano Carbon Technology, obtaining a high material strength and resistance with just 5.9 Kg of weight.
Moving back to technological products, Aston Martin along with Cranfield Aerospace Solutions, Cranfield University, and Rolls-Royce’s Aerospace division developed the vertical take-off capable aircraft Volante Vision Concept. The project shows the vision for hybrid-electric private mobility of the future, not only more efficient but also cleaner.
Along with road and sky, Aston Martin goes on the water with the 1040 bhp powerboat AM37. Explorations into the nautical world seem quite common in the automotive world too. At some point and to a different extent, various OEMs tried their own iteration of a luxury fast boat. Bugatti, Ferrari, and Lexus to name a few. Maserati has a long-standing commitment with its sponsored ‘Multi 70’ Trimaran and Lamborghini just revealed its ‘Lamborghini 63’ powerboat.
The AM37 is not the only waterborne vehicle from the British manufacturer. The submersible Project Neptune built with Triton Submarines LLC is a three-person concept that should become a proper private transportation vehicle integrating Aston Martin’s brand essence.
First, it is important to contextualise this diversification. Most of these ventures came between 2017 and 2018 when the company was experiencing steady growth and had already for the previous two years.
According to a report by McKinsey, the automotive sector will diversify toward on-demand mobility and data-driven services. New joint-ventures and partnerships in the automotive sector are about survival and staying ahead of the change happening right now.
This is somewhat true for the luxury segment too but in a much more indirect way. Like happens for its competitors, Aston Martin is trying to acquire a larger status as a full-blown luxury brand, not just an automotive one. This is a phenomenon that is not limited to the automotive industry but different luxury sectors.
Each one of these partnerships specifically targets and enhances a brand’s value or feature, whether it is the racing DNA, heritage, luxury, design, comfort, quality materials, future vision, or technological innovation.
None of these activities alone is large enough to offset the losses of the core automotive business. And that has never been the true objective. In this challenging time though, they could still play an important role for Aston Martin.
Strong vision and the creation of a proper ‘ecosystem’ enhance the sense of belonging to a company. This diversification into other products is highly unlikely to attract people who are not already fans of the brand, but it can help increase loyalty and customer retention way more than before by turning the journey into a lifestyle experience and the name into one that clients are proud to represent.
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