The global automotive industry is struggling – investment bank Morgan Stanley predicted worldwide auto sales would slip 0.3 per cent in 2019 to 82.1 million – but a factory on Pickersleigh Road at the foot of the Malvern Hills in Worcestershire is turning record profits.
Honda recently announced its departure from the UK and Vauxhall has halted production of electric and hybrid cars in its assembly plant at Ellesmere Port until the outcome of Brexit is decided. Recent research by the Confederation of British Industry also found UK firms’ growth had hit a six-year-low amid Brexit and global trade fears.
Yet for the third year in a row, 110-year-old classic car manufacturer Morgan Motor Ltd has hit record profits, seeing a 95 per cent increase in pre-tax earnings at the end of 2018, up to £3.4m from £1.7m in 2017. Last year it reported revenues of £33.8m. The family-owned firm recently sold its majority holding to Italy’s Investindustrial, further securing its future.
One answer to its remarkable success lies in the firm’s innovative, if somewhat paradoxical, modernisation of its heritage. One of its largest sources of profit in 2018 was the record prices achieved for the final Aero GT and Plus 8 50th Anniversary Edition models, and investment of £6.3m in research and development over the last three years will, it hopes, bear fruit in a yet-to-be-launched car.
The firm’s output decreased last year due to the discontinuation of its iconic V8-engined model (though exports increased nevertheless), which is to be replaced by a "wide-body" sports car launched in celebration of the company’s 110th anniversary.
Investindustrial also holds a stake in another British car manufacturer. In 2012 it invested £150m in Aston Martin for a 37.5 per cent share, part of which was sold during the company’s IPO in October last year. Since then it has seen mixed fortunes.
Revenues rose 25 per cent to £1.1bn in 2018, while car sales – Aston Martin reported its special editions, including the Rapide and Vanquish models, were in high demand – were up 26 per cent to 6,441. However, in its first results since it went public, the firm revealed the cost of its stock market listing had pushed it to a pre-tax loss of £68m, compared with profits of £85m in 2017.
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