MILLBROOK, England (Reuters) - Loss-making British luxury sports carmaker Aston Martin expects to make a significant return to profitability after 2016, its finance officer said on Monday.
The 101-year company said it would start to see the benefits of a five-year 500 million pound ($843.57 million) investment program, having struggled to grow since the economic downturn.
“Once we finish the investment phase, we are very, very confident that it’s going to take us to a very sustainable profitability,” CFO Hanno Kirner said in an interview.
“We expect to return to significant profitability in the periods after 2016.”
Aston Martin said in April it was investing in new electrical and electronic technology alongside a 2013 strategic partnership with Daimler (DAIGn.DE) through which the company benefits from shared engine development.
The Gaydon, Warwickshire-based company has teamed up with Daimler’s high-performance Mercedes-AMG GmbH division to develop a new generation of bespoke V8 engines.
That move aimed to help it better compete with the likes of Volkswagen’s (VOWG_p.DE) Bentley and Porsche units, as well as Jaguar Land Rover, which has achieved strong sales growth, especially in China, since 2008.
The carmaker, owned by Kuwaiti and Italian private equity groups, has had a turbulent 12 months after it scrapped its “Cygnet” model in October, which was an attempt to tap into the popularity of city cars.
It has also suffered from the lack of SUV model - excluding it from another market that has defied Europe’s recession.
Aston Martin reiterated its focus was still on sports cars, but Director of Product Development Ian Minards said he remained “open-minded” to a possible sports utility vehicle.
The company posted an adjusted pretax loss of 24.6 million pounds in 2012, down from a 21.2 million pound loss a year earlier.
Aston Martin has previously said retail volumes fell to 3,800 units in 2012, from 4,200 in 2011, but that it is aiming to double sales by 2016, helped by the new V8-engine versions of the Vantage and DB9 models.
But the firm suffered a setback in February when it was forced to recall 17,590 cars after discovering a Chinese supplier was using counterfeit plastic material in its production of pedals.
Aston Martin, which said the recall cost it 1.5 million pounds, saw a barrage of negative media coverage in China where the state media slammed what it called the stereotyping of a low-quality ‘Made in China’ manufacturing.
Kirner said the firm was moving on and played down the impact.
“With a super-luxury brand there was a lot of excitement generated, but materially it is not a big recall for us.” ($1 = 0.5927 British Pounds)
Reporting by Costas Pitas, editing by Louise Heavens