Welsh option makes more sense for Aston Martin, says West Midlands auto academic
ASTON Martin’s decision to locate its new production facility in Wales rather the West Midlands was a matter of expediency, a leading academic in the region has said.
Christian Stadler, Professor of Strategic Management at Warwick Business School, said the Welsh option made the most sense economically because it would save the car company a significant sum on building costs.
However, he has warned the Gaydon firm that it may need to find a new investment partner moving forward to ensure it can deliver future projects.
On the choice of the factory location, he said: “People may ask ‘why Wales?’. Well, Aston Martin considered 20 locations using three criteria: subsidies, speed of getting production off the ground for the new DBX (crossover), quality of labour and implications for the brand.
“In terms of subsidies, Wales was not the most generous but they did well on the two other parameters. A former MoD facility will be used where hangars can be converted into a factory.
“The Aston Martin decision is in line with a broader trend: labour cost is no longer the main consideration. Smart companies are particularly wary of the implications in terms of quality and image. We have seen something similar for example when Porsche decided to produce the Porsche Cayenne in Germany rather than US (i.e. close to the customer) or in Eastern Europe (i.e. lower costs).”
Related article: Aston Martin snubs the West Midlands in favour of Wales
He said Aston Martin’s value proposition was a very expensive, up-marked car that is quintessentially British. So producing the car outside the UK would have threatened its ‘Britishness’, a factor used by marketing departments at several top companies in the UK, not just car manufacturers.
“Of course there are challenges ahead however: Aston Martin is a small independent car producer. It lacks the marketing power of JLR who has the support of Tata. That showed in the aftermath of the financial crisis where it did not do as well as other luxury car makers,” added Prof Stadler.
“The new investment won’t deal with this structural issue. The new investment is helpful though in the sense that an attractive new product will come to market quickly. Constant updating of product pipeline is crucial in the industry
“My suggestion here for them would be it might be a good idea to find a strong outside investor in a similar way as JLR.”
Despite the headline new factory, the company has also pledged new jobs and expansion at its existing base in Warwickshire – a move that has been welcomed by the supply chain.
Paul Cadman, Group Managing Director of Oldbury-based Futura said: “This is a firm show of intent by Aston Martin and a further commitment to producing next generation cars in the UK, which can only be good news for the supply chain.
“It makes sense for a brand – built on design flair and innovation – to be close to suppliers and strategic partners who share the same values and passion to create unique looking vehicles.
“This is second nature to Futura Group and we are already working with the company on exploring new opportunities on new model introductions.”
The Welsh factory will be the production base for the firm’s new DBX crossover vehicle, the bulk of which will be destined for export to markets such as China and the United States.
