Oil markets nervous over downward demand forecast

The name is Balmer. Dan Balmer.

The New Middle East Business President at Aston Martin Lagonda, the iconic British builder of James Bond, is grateful for the glamorous legacy of the fictional super-spy, but is also aware of the need to move on .

"We have been working with Bond for 50 years and it has been a real asset to us. But we have an internal team called "Beyond Bond". If we want to expand the brand's reach, in the family and female markets, we need to look beyond the cars driven by Bond, "said Balmer.

This remoteness of certain aspects of Aston's heritage is reflected throughout society. Aston has been around for more than 100 years, but has embarked on an ambitious "strategy for the second century" under the direction of the group, Andy Palmer.

The emerging society will be different, a luxury brand rather than a mere manufacturer of fast toys for boys; it will be increasingly global, with the Middle East playing a central role; and, hopefully, sustainable, financially and environmentally.

Palmer's strategy is to move the group away from the booming cycle – it went bankrupt seven times in its first century. He achieved a key element of this strategy with an initial public offering (IPO) on the London Stock Exchange last month, worth an estimated $ 5.6 billion.

Aston will continue to manufacture fast cars, but they will be more and more fuel efficient and even electric; and he will put his name on other luxury products – the projects of apartments and fast boats are well advanced. Submarines and vertical take-off aircraft are the next items of the Aston luxury brand.

Bond, with his love for high life and high-tech gadgets, would probably favor the strategy. "We do not harass the brand. You will not see us doing aftershaves and umbrellas. But customers want to buy our cars because they want to buy beauty, and we are now expanding to other areas, "Balmer said.

——-

ORGANIC:

BORN

1976 Southampton, United Kingdom.

EDUCATION

Apprentice design technician, Rover Group.

CAREER

• BMW design engineer.

• Rolls-Royce Motor Cars, General Manager, Asia-Pacific.

• Aston Martin Lagonda, President for the United Kingdom and
South Africa.

• Aston Martin Lagonda, President for the Middle East, North Africa and Turkey.

——-

He knows something about luxury marketing and automotive design, having previously worked for Rolls-Royce in Asia, Singapore. But the challenge now is to expand Aston's business in the Middle East into a new division within the global structure – covering the Middle East, North Africa and Turkey (MENAT).

Reflecting Aston's traditional regional business pole in the region, it will be based in the UAE, but its headquarters have been moved from Dubai to Abu Dhabi, where the MENAT headquarters was officially inaugurated last week.

Balmer believes that Dubai's reputation for flash glamor is "in the past", but also thinks that the UAE's capital is more in tune with the Aston image. "Aston has understated elegance and that is also how we feel about Abu Dhabi. It's the capital, recognized as the center of the financial scene, the big decisions are made here, and with Yas Island (where the big Formula 1 Grand Prix will be held later this month), it's a place ideal for motorsport. "

Track racing is always an important thing for Aston, not only because many of its cars are too fast to be driven to the full, but also because it helps the company maintain its image at high speed against competitors such as Ferrari and Lamborghini. UAE sports cars of choice.

As part of the second century strategy, Aston can offer the DB11, the DBS ("a boot in costume", says Balmer), the Vantage and the Valkyrie as his "obviously aggressive" cars to compete with the Italians, and will start soon produce a range of mid-engine cars to take on the likes of Porsche and Mercedes.

Saudi Arabia loves vintage cars like our Vulcan. But we must develop the brand.

"We are coming out of our conservative shell. These are track-based products, but intended to be driven on the road, real sports cars, "said Balmer.

But the really radical product is yet to come, and it will occupy a prominent place on the roads of the Middle East, by 2020. Aston has so far resisted in the SUV market, which is the growth sector. the fastest in the world's largest markets, such as the United States and China.

The DBX is a luxury SUV, a little larger than most current road vehicles, with five doors and elegant lines. It is aimed at the upmarket family market and seems a natural choice for the Middle East, gone crazy for SUVs for decades.

Balmer thinks it will become Aston's biggest seller in the region. "We simply had not had the offer on this segment before, but in the Middle East, the majority of luxury car buyers would be SUVs, sports cars being a weekend toy. ", did he declare.

He looks forward to launching DBX on Saudi Arabia. Aston has been in the Kingdom for a long time, with a longtime partner, the Hajji Husein Alireza group and showrooms in Jeddah and (more recently) Riyadh, which will be followed by a point of sale in Alkhobar.

But Saudi Arabia has not exploited the potential of its large, wealthy population. It ranks behind the United Arab Emirates, Kuwait and Qatar, roughly alongside Turkey in the Aston regional sales rankings.

"Saudi Arabia has more opportunities for us. Because of the weight of the rich, it means that more people will buy our cars there. Saudi Arabia loves vintage cars, like our Vulcan, and the other great cars we produce, such as Vanquish and DBS. But we must develop the brand, "said Balmer.

A memorable day in the 105 years of Aston Martin #AstonMartinLagonda pic.twitter.com/zKw4644Y09

– Aston Martin (@astonmartin) October 3, 2018

"We need to do some educational work in Saudi Arabia, both in terms of what Aston represents in the market and the new products. I think that the Saudis will commit to the idea of ​​DBX, and this is where our main goal will be for us. "

He believes the Saudi market may be more conservative than the United Arab Emirates in terms of colors and models, but there is potentially a much larger market among Saudi nationals than the Emirati.

The Saudis buy Rolls-Royce cars in large numbers. After working for the luxury automotive leader, Balmer appreciates the difference between marketing Rolls and Aston. "They differ in the type of client. Aston buyers tend to be really in their cars. They are "heads of gas," but they are also insightful.

"Rolls customers also know their car and may have an Aston in the garage, but they buy a Rolls-Royce rather as a stated goal – for business purposes or a reward in life. An Aston is more a purchase of emotion and desire, "he said. Whether reward or emotion, buying an Aston is a significant investment. The average price of a ticket is about $ 175,000, and such an impulse purchase could easily be deferred if the personal economic downturn slowed down.

In the Middle East, where economies are tied to the price of oil, Aston is subject to the vagaries of the global crude market. "What's happening in the region is that governments are moving away from oil. (Saudi Arabia Reform Program) Vision 2030, for example, is a big change and good news for us. This will eventually eliminate the volatility of the macroeconomic environment. But we will still depend to some extent on global economic forces. China is now the engine of the world in many ways, "said Balmer.

The IPO was an opportunity for Aston's long-term lenders – Italian and Kuwaiti financial institutions – to make a profit on their investments. The sale of shares has not raised any new money for expensive research and development, which some analysts have criticized.

"There was no massive cash injection because all our new projects were already invested. And we make profits. But the IPO guarantees the long-term future of the company, "said Balmer.

In difficult global markets, equities have traded below the issue price since the first day, but recently, two large investment institutions – Merrill Lynch and Goldman Sachs – have placed them on the list of equities. buy. If they get enough value to be on the main list of the FTSE 100, Aston will be the first automaker for 30 years to feature on the UK's leading trading platform.

It would be a sort of triumph for Palmer and for the second century strategy, but Aston has another line of arrival in front of him: the Abu Dhabi Grand Prix. "We've planned a number of things around the race, including winning," said Balmer.