TORONTO (Reuters) - Aston Martin Holdings Ltd expects a return to profitability in 2018, as the now money-losing luxury automaker plans to boost revenues with renewed versions of its sports cars, chief executive Andy Palmer said on Wednesday.
The British automaker, whose sports cars were popularized by James Bond films, is investing heavily to update existing models and develop several new vehicles through the end of 2019, including its first SUV, and the 2 million pound ($2.5 million) to 3 million pound ($3.7 million) Formula 1-inspired AM-RB 001, the most expensive new car ever built by Aston Martin.
“You’ve got a complete renewal during the course of 2018 of the sports cars,” Palmer told Reuters on the sidelines of the Canadian International Auto Show in Toronto.
Unlike other luxury sports car brands, which are part of mass-volume auto groups and can benefit from economies of scale, Aston Martin remains independent, Palmer said.
“We have to amortize the R&D (costs) on a small volume,” he said. “That’s what justifies the car being expensive.”
The carbon fibre AM-RB 001, which is being developed with Red Bull Advanced Technologies for expected delivery in 2019, is using Canadian composite specialist Multimatic as a supplier, Palmer said. All 150 cars have been sold, with another 25 to be manufactured as a separate variant for the track.
Palmer said one of Aston Martin’s highest volume models will be its DBX SUV, which when delivered in late 2019 would compete with the Bentayga produced by Bentley Motors Ltd, a division of the Volkswagen Auto Group (VOWG_p.DE).
Pickups and SUVs accounted for 59.5 percent of U.S. auto sales in 2016, up from 55.8 percent in 2015, and North American appetite has prompted luxury makers such as Rolls Royce and Lamborghini to come out with new SUV models.
Palmer said Aston Martin expects to build between 4,000 to 5,000 SUVs a year.
“We don’t want to go to big volume,” he said. “It’s basically high price, low volume, exclusivity.”
Aston Martin, which is to publish its 2016 financial figures at the end of February, is held by Kuwait’s Tejara and Italy’s Investindustrial. The private equity firms hold an equal voting stake, he said.
Daimler (DAIGn.DE) has a 5 percent stake in Aston Martin in return for access to certain technologies for connected and autonomous cars.
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Reporting by Allison Lampert; Editing by Denny Thomas and James Dalgleish