Ferrari vs. Aston Martin: Truly Competitors?

There was one exchange on the recent Ferrari Q3 earnings call that really caught my attention:


Question: Giulio Pescatore – BNP Paribas

And first one, I want to come back on a comment made by one of your competitors. I know you don’t comment on competitors, but it was striking because they were calling out weakness in luxury cars demand, especially in North America. And what they said, it seemed very stark contrast with whatever you’re saying today. So, I’m not asking you to comment on competition, but just what do you think is making the difference here? Why your demand is so much healthier and resilient than some of your peers?


Answer: Benetto Vigna – Ferrari CEO

I think when we’re talking about Ferrari car, we are talking about an ultra-luxury car that is also addressing maybe demographics that is different from other brands. But the second I have been — in these 2 years, I have seen, and I’ve met many people that are touching our brand and they have seen an attachment, a sense of bonding that is really unique. I mean, I was in Mugello last weekend, I was in Pebble Beach. And I can tell you, Giulio, that right after the car was shown, it was fully allocated. I mean the car — there was a client close to me that started to cry, literally.


Which is a wonderful way of saying we don’t comment on our competitors because we don’t believe we really have any.  We operate in our own unique environment and ecosystem.  Whatever weakness they are seeing might be happening in their market but certainly not ours.

The competitor that Pescatore was referencing is Aston Martin Lagonda as they referenced weakness in North America in their Q3 commentary the day before.  Now Aston Martin’s Executive Chairman, Lawrence Stroll has stated repeatedly over the years that:

Our vision to become the world’s most desirable, ultra-luxury British performance brand.


This would indicate that Aston Martin sees itself in the same competitive reference group as Ferrari.  In fact, to try to bring his vision to life, Stroll has seeded Aston Martin’s management ranks with a significant number of Maranello refugees, including Aston Martin’s current CEO, Amedeo Felisa.  In many ways, the current Aston Martin executive team is a pretty close recreation of Ferrari’s management team circa 2015.


The question therefore is do the Financials suggest Ferrari and Astin Martin are true competitors.


Starting with a few basic numbers and then looking into the most recent results in terms of both Q3 2023 and YTD 2023.  Today Ferrari has a market cap of $65 bil. and Aston Martin’s is $1.9 bil.  If you invested $100 in Ferrari on the day Vigna took over as CEO, you would have $165 today.  The same investment in Aston Martin on the day Felisa took over would leave you with $31 now. If you are in London, it’s basically the difference between dining at the River Café or being relegated to Pizza Express.  While brand strength and equity value are as much perception and can vary greatly depending on the eye of the beholder, where the undeniable truth does shine through is in the financial results.


Ferrari’s financial results in both the latest quarter and for the year so far this year have simply been stellar:

Aston Martin’s financials at the top of the P&L are quite positive, but it all turns very pear shaped as you drop down.

Getting into a few more details just on the volumes, Ferrari’s numbers are very healthy across the board with only one minor negative in Q3 in China, HK, & Taiwan.  This is more due to model transition than any market weakness.  It’s also important to note that Ferrari’s dealers carry no stock of new cars.  With an order book that now stretches to the end of 2025, all the cars Ferrari produces are to order so wholesale and retail are identical numbers. 

Aston Martin’s numbers are strong on a YTD basis but in Q3 they are starting to show weakness.  The Q3 Americas number, which is Aston Martin’s largest market is very concerning.  Aston Martin claims that they only produce to demand but a quick survey of Aston Martin’s US dealers would indicate that Aston Martin has a very liberal and creative definition for demand.  Aston Martin’s order book for its latest DB12 is best described as “light”.  While the order book Ferrari’s full portfolio extends to over 24 months, in the Q3 earnings call, it was revealed that the ultra-hyped DB12 orders only extend to Q2 2024.

When you start drilling into the cash flow and debt loads the differences are massive .  Positive and growing free cash flow is the definition of a healthy business.  Its near impossible to stay in business long term if you can’t generate positive cash flow.


Ferrari’s Free Cash Flow numbers are simply world class

Aston Martin’s Free Cash Flow numbers are positively abysmal. 

The delta on YTD Free Cash Flow between the two is € 976 mil. Because of this, Aston Martin is having to continuously raise new equity to keep the lights on and service its debt.  That delta is almost the size of Aston Martin’s YTD revenue number.  That great Free Cash Flow is also what allows Ferrari to invest heavily in developing its portfolio and emerging technologies which serves to continue to widen the gap to the competition. 


In summary, Ferrari is a cash machine. As a business, Ferrari is in a league of its own and has no discernible competition.  While that gap today is huge it is likely to only widen as Ferrari is consistently and continuously able to invest in developing world class market leading supercars.  With its very tight cash position, Aston Martin on the other hand is limited to facelifts of current models (see DB12) or very extended development times on new (Valhalla). The stock market has clearly voted in Ferrari’s favor as its market cap is over 30 times that of Aston Martin.  On a final note, as far as Brand equity is concerned, the comparison is a bit more subjective without access to Brand Equity measures which neither company share.


Note: I do not and have never owned any AML or RACE (Ferrari) shares.

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November 2023


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2 Thoughts on Ferrari vs. Aston Martin: Truly Competitors?
    22 Nov 2023

    “Aston Martin”, it has a nice ring to it.

    “Let’s take the Aston” sounds wonderful too.

    Even in communist Scotland where you have the petty, dumb, knuckle dragging retards, or SNP supporters who absolutely despise anybody with any success, anybody who’s worked hard for themselves, you can park an Aston in the street comfortable that it probably won’t get vandalised or keyed. You might not be able to with a Ferrari.

    And that is the value of the brand.

    Alas, the Ferrari brand is in its own stratosphere out of reach. Built not on someone bleating on about “brand” but on successive developments of their products to improve their manufacture, their quality, their customer care, their looks. Success building upon success. That and their race history has made Ferrari one of the most desirable brands. Most importantly, it’s built upon product. Right now their product line up has never been better, and it has been like this for a number of years with constant improvements.

    Stroll wants to shout at the top of his lungs “Aston Martin” to try and get you to buy into his belief it’s as valuable as Ferrari, but you haven’t been listening. In some ways the brand is highly valuable, but only because of 007. Not for the product; not right now anyway. All the designs by Marek Reichman have failed to meet the mark. Couldn’t hold a candle to Ian Callum’s work for sure and the only one close to success was the DBS based upon Callum’s DB9. Even today the best people can say is the DB12 is “ok” looking. After how many attempts to design cars for Aston and it’s just “ok”?

    Aston will keep bumbling along from rescue package to rescue package until they sack Marek Reichman and find a competent designer. They’re already planning for one in 2024. They’re already planning to fail in 2024!

    Are they truly competitors? It’s a good question and Stroll would certainly think he can make Aston Martin as valuable as Ferrari. He’s got investors buying in to his delusion and losing money on top of that too. Alas, as the one who seems to have control of Aston Martin he hasn’t exerted the control he needs to. This isn’t a case of rebranding cheap Chinese handbags and convincing the vain they need one, this is where the product has to stand on its own looking fantastic and have people buying despite their flaws. Cars that when you park you look back for another look; to be proud you worked hard to earn it.

    No, they’re not competitors. But McLaren are for their sports cars with Ferrari. The MP4-12C instantly gave Ferrari a bloody nose and they had to react to a real competitor. McLaren are only improving, product, and reputation.

    22 Nov 2023

    Having dealt with Aston Martin in the Uk I’m not surprised they are struggling. I’ve never had such bad customer service and experience. Ever.

    The dealership experience was good. After sales was dreadful. Build quality was woeful and the service to rectify these issues on a £150k brand new car was appalling. Over 4.5 years the car spent more time with AM than me. Multiple times I went to collect the car and they hadn’t fixed what it was there for or they had damaged the car and tried to give it back hoping I didn’t notice.

    Upon buying my first Aston Martin, I was planning to buy more. A DBS, maybe a Valhalla or the new Vanquish. Instead I vowed to never buy another car from them again.


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