News - Aston Martin
New boss for Aston Martin as share prices plunge
Ex-AMG boss Tobias Moers joins Aston Martin during sagging sales and excessive debt
28 May 2020
By NEIL DOWLING
BELEAGUERED British sportscar icon Aston Martin, weighed down by $A1.15 billion of net debt and plunging car sales during the COVID-19 pandemic, has changed its guard and taken on former Mercedes-AMG boss Tobias Moers as its new CEO.
Mr Moers’s appointment as Aston Martin Lagonda’s boss sees the departure of former president and group CEO Andy Palmer, who held the post for six years, and follows a consortium of new investors and a shareholder issue that injected $A1.1 billion to keep the car-maker afloat.
The replacement of the CEO was orchestrated by Aston Martin’s new chairman, Canadian businessman and Ferrari dealer Lawrence Stroll.
Aston Martin insisted the appointment had nothing to do with Mercedes-Benz having a five per cent stake in the brand or the ongoing supply of AMG V8 engines used in the Vantage and DB11 V8.
Mercedes-AMG also supplies electronics to Aston Martin for all its models and powers the Racing Point Formula One team that will become the Aston Martin Formula One team next year.
While the business plan looks solid, Aston remains financially weak. Stroll and partners invested $A485 million in the company, with another $A590 million coming through a shareholder-funded rights issue.
However, according to the Financial Times newspaper, Aston Martin’s performance since its initial public offering in 2018 has been “dismal”.
Its shares have fallen by 98 per cent – from $A35 when it first listed to A65 cents last week – as the global luxury car market has slipped and dealerships become overstocked.
Shares are now up to A94c, increasing after the change in leadership became public.
On top of the sagging share price, the company has poor demand for the Vantage model.
Costs increased when Aston Martin opened its new factory in Wales to produce the DBX SUV and led the company to take on debt packages to maintain the business.
In the first three months of 2020, the Aston Martin Lagonda reported a $A222 million loss as the debt repayment and factory start-up was compounded by COVID-19 as it closed factories and dealerships.
Revenue fell by 60 per cent to $A146 million as car sales halved, according to the FT.
It does, however, follow Aston’s history. The brand has only been profitable for two years in its 107-year history and has been bankrupt seven times.
The saviour in this is seen as Tobias Moers. The 54-year-old German joined AMG after graduating university before Mercedes took control in 1999 and became boss of Mercedes-AMG in 2013.
Daimler AG chairman Ola Kaellenius said: “Tobias Moers has led the AMG brand to great success and we would like to thank him warmly for all his achievements at Daimler.
“We have mixed emotions about his departure. On the one hand we are losing a top executive, but at the same time we know that his expertise will be of great value to Aston Martin, a company with which we have a longstanding and successful partnership.”
Mr Moers has seen AMG sales rocket, increasing from 20,000 in 2012 to 132,000 in 2019.
His CV includes the GT and the delayed AMG One hypercar that coincidentally is a competitor to Aston Martin’s looming Valkyrie.
Mr Moers starts at Aston Martin in August where one of his first ports of call will reportedly be removing Aston Martin from its relationship with Red Bull Racing.
He will also oversee the move from Racing Point Formula One team to Aston Martin’s branding by next season.
Aston Martin’s long-awaited DBX SUV, regarded as a vital model to boost sales, arrives in Australia this year.
Mr Palmer, who before Aston Martin was global head of product development at Nissan, was removed from his position as CEO on May 25.
Critics of Mr Palmer say he unnecessarily diversified Aston’s model range to broaden its customer base and that the company had overextended itself and stretched too far.
Mr Moers’ departure as chairman of Mercedes-AMG has subsequently led to other personnel changes at the German performance brand, with Philipp Schiemer named as his successor
Jochen Hermann has meanwhile been appointed as chief technical officer, marking his return to Mercedes-AMG from his current position as head of e-drive development at Daimler AG.
Mr Schiemer and Mr Hermann start in their new roles as of August 1.
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