Is Aston Martin Going out of Business?

Since its IPO debut last October, Aston Martin shares have fallen 75%. The company is facing stiff competitions from Italian rivals, and the need for significant capital improvements to factories and equipment is becoming increasingly necessary to keep pace in the ultra-luxury market. Through June, European sales are down 19%, and the company's forecast for operating margins has been reduced from 13% to 8%. A free-falling stock, sagging sales and reduced profitability do not bode well for a firm needing to make significant capital improvements, and there does not seem to be a light at the end of the tunnel. While Aston plans to launch an SUV in the coming months, it is not expected to rescue the company from its current financial woes in a meaningful way, and a path forward is unclear.

For those looking to invest in an Aston of their own, beware. The company's flagship supercar, the Vanquish, which can be purchased new today for circa $350,000, can become a relative bargain for those willing to wait. The same car purchased in 2014 for $340,000, can now be had for $139,000, and with only 3,675 miles on it--that's a $200,000 loss, while it sits unused in the garage. Given the rate of depreciation, that cost the owner about $50 per mile driven. So, you better think twice about taking the Aston out for errands, as a trip to the corner market could cost you $250 just driving down the street. As for an oil change or minor service at the dealership, don't ask--you've probably made mortgage payments for less.