Aston Martin Lagonda Global Holdings plc has been on a whirlwind ride. From near-bankruptcy to a Formula One resurgence, the iconic British brand has become synonymous with both luxury and drama. Now, as they unveil a suite of dazzling new vehicles, a whisper is rippling through the ultra-luxury market: Is Aston Martin positioning itself to become the next Bentley?

The most recent earnings transcripts paint a picture of a company laser-focused on elevating its position in the automotive world. Executive Chairman, Lawrence Stroll, exudes an almost infectious confidence. He speaks of "toppling Italy's finest" and creating a "trilogy of cars" that surpass the hallowed Porsche 911. This isn't mere corporate jargon; it's a bold declaration of intent.

Aston Martin is clearly aiming for a Bentley-esque level of exclusivity and prestige, and they're not shying away from the comparison. Stroll highlights the media praise, comparing the DB12's interior quality to Bentley's renowned craftsmanship. This isn't just a coincidence; it's a calculated strategy to attract discerning customers who value opulence and performance in equal measure.

But the parallels go deeper than just aspirational rhetoric. A closer look at the financial data reveals a fascinating trend. Aston Martin's core average selling price (ASP) has experienced a remarkable compound annual growth rate (CAGR) of 14% since Stroll's arrival in 2020. This is strikingly similar to the trajectory Bentley experienced under Volkswagen Group ownership. Both companies strategically focused on limited-edition, high-margin vehicles, while simultaneously elevating the quality and desirability of their core range.

This focus on high-margin products is crucial to understanding Aston Martin's potential for Bentley-like success. Stroll insists that all new models have a minimum 40% gross margin. This commitment is reflected in their 2023 results, where gross margin surged by 650 basis points to 39.1%. They are on the cusp of achieving their ambitious target, a testament to their meticulous focus on profitability.

Interestingly, the shift towards personalization and options plays a significant role in this margin expansion. Aston Martin's Q by Aston Martin bespoke division has seen a 200 basis point improvement in the contribution of options to the ASP, now exceeding 15% of the core range. This echoes Bentley's success in capturing the lucrative personalization market, where customers are eager to customize their vehicles to reflect their unique tastes and preferences.

"Further fueling this hypothesis is Stroll's revelation about a shift in electrification strategy. While maintaining their partnership with Lucid Group for future battery electric vehicles (BEVs), Aston Martin is now prioritizing plug-in hybrids (PHEVs) in the near term. This suggests a focus on catering to the current demands of their ultra-luxury customer base, a segment known for its appreciation of both cutting-edge technology and traditional automotive experiences."

Bentley, under Volkswagen's guidance, adopted a similar approach, successfully integrating hybrid technology into their existing models, appealing to environmentally conscious consumers without sacrificing the brand's signature performance. This strategic alignment with Bentley's proven approach further underscores Aston Martin's ambitions to reach similar heights.

However, a crucial question remains: Can Aston Martin achieve the scale necessary to truly rival Bentley? Stroll's vision hinges on surpassing the historical volume of 6,000 front-engine sports cars. He believes the combination of superior product, heightened brand awareness, and a surge in new customers will propel them beyond this threshold.

This ambition translates to a target of roughly 10,000 units by 2027-2028, a mix of 6,000 front-engine sports cars, 4,000 SUVs, and an unspecified number of high-margin Specials. This would place them firmly within Bentley's current volume range, signaling a legitimate challenge to their established position.

However, this ambitious growth plan hinges on flawless execution. Aston Martin has faced challenges in the past, particularly with the DB12's initial production ramp-up. The company attributes these hiccups to supplier readiness and software integration issues.

These are not insignificant hurdles. A smooth transition to their new generation of vehicles is paramount to maintaining the positive momentum they've built. Stroll's reassurances about overcoming these challenges inspire confidence, but the proof will be in the numbers.

Aston Martin Quarterly Wholesale Volumes

The following chart shows Aston Martin's quarterly wholesale volume trend from Q1 2023 to Q1 2024, highlighting the significant growth expected in the second half of 2024.

Perhaps the most intriguing element of this potential Bentley-style transformation lies in Lawrence Stroll's own role. He has steered the company through turbulent waters, secured vital partnerships, and spearheaded the development of a breathtaking new product portfolio.

While the incoming CEO, Adrian Hallmark, brings invaluable experience from his time at Bentley, the question of Stroll relinquishing his Executive Chairman position remains unanswered. This ambiguity raises questions about the extent of autonomy Hallmark will have in shaping the company's future.

Could Lawrence Stroll be quietly orchestrating a long-term strategy to elevate Aston Martin to Bentley's level of success, all while retaining ultimate control? The answer remains to be seen, but the evidence suggests a compelling narrative.

Aston Martin is undergoing a metamorphosis, driven by a relentless pursuit of luxury, performance, and exclusivity. Whether they can fully realize their Bentley-esque ambitions will depend on their ability to execute flawlessly, navigate the complexities of electrification, and ultimately, forge their own unique path in the ultra-luxury market. One thing is certain, Aston Martin's journey will be captivating to watch.

"Fun Fact: The Aston Martin DB5, made famous by James Bond in the film "Goldfinger," is considered one of the most iconic cars in cinematic history. Its gadgets and sleek design solidified Aston Martin's image as a symbol of sophistication and adventure."