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Ready for a $1.7 million car?

Posted Aug 29 2008, 10:32 AM by Andrew Horowitz
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Aston Martin is shaking up (not stirring) the automobile market with the introduction of a new coupe that is all about the prestige. Even as the industry is in a slump, this company believes that 77 of this newest addition to their line will sell. If you recall, Ford sold off the company for a substantial loss only last year and now this yet-to-be-named car will probably become the latest trophy for the rich and famous. Come to think of it, I bet that Larry Ellison, founder of Oracle will be one of the first in line as he will be in looking to spend some of that estimated 37% pay raise he is slated to receive.

Of course, Ellison deserves the $72 million annual salary, possibly even more than Merrill Lynch's John Thain who is reported to be making upwards of $74 million per year. I am unsure who will get one of these beauties first, but the real question is whether they are going to buy or lease....

Ironically, Chrysler today announced that they are considering selling off its sporty Dodge Viper nameplate in an attempt to control some of the bleeding. That is on top of the recent request from Ford and GM for $50 billion in loans from the government in order to explore more energy efficient cars. Confused?

The ugly truth is that the auto industry is not only having trouble with delinquencies and defaults, they will see difficult times ahead as consumers are slowing down their spending. What's more, the industry is clearly having an identity problem.

So, while Aston Martin may sell 77 cars to the ultra-wealthy and bring in revenues of $130,900,000 $1.3 billion, it is clearly not going to be as easy for the traditional auto companies to sell out their inventory.

Related Reading:

How to Fix the U.S. Auto Industry

Ford Shareholders want out

 

Andrew Horowitz is a money manager and the founder of Horowitz & Company. He is also the author of the bestselling book, The Disciplined Investor . Check out his latest investment idea or listen in as he hosts, The Disciplined Investor Podcast.

 

 

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Comments

 

Nobody, but nobody deserves a $72 million annual salary. It's outrageous and sinful.

sour grapes (Posted 08.29.08 11:25 AM) Report Abuse

is it really news worthy to publish this type of info during this economic times, its like throwing mud in the faces of the population of the U.S. and people in general, 72-74 mil per year is nothing to flaunt either. look at the suffering around, are they handing out these millions, spending it on a car or anything material is an added insult, if you rich folks like these kind of stuff, keep it to yourself. it's a waste of time and space.

Macario (Posted 08.29.08 12:10 PM) Report Abuse

You socialist crybabies should be happy that some highly skilled people can make this much money in our great country.  I bet you're all for wealth distribution and nationailized health care too.

Cheers to the few that excell beyond the norm I say!  Cheers for the talented and hard working that make their own way and prosper from it.  

Sour Grapes, you've aptly named yourself.  

American Biker (Posted 08.29.08 2:50 PM) Report Abuse

You guys are a bunch of ninnies. It isn't sinful to make money, it's all relative to the industry you are in so quit preaching.

Grammar? Go back to teaching your sixth grade English class.

No one is throwing mud in the face of anyone a-hole. Stick your head back in the sand so you don't hear about people that do better than you, then go back to installing man hole covers for your third job

mds0549 (Posted 08.29.08 2:58 PM) Report Abuse

Considering that Bill Gates received only $500,000 per year while he was CEO, doesn't Ellison have enough stock??(20 billion +). Maybee he should pay that salary in a dividend to his loyal shareholders.

meh (Posted 08.29.08 3:22 PM) Report Abuse

Follow up..... The "deserves" is sarcasm...

Andrew

Andrew Horowitz (Posted 08.29.08 3:37 PM) Report Abuse

Those CEO's probably make the salaries they do because they can compute simple math equations.  77 vehicles at 1.7 million a peice does not equal 1.3 billion.  No wonder Andrew Horowitz is such a great Money Manager and best selling author on Finance.

Math Tutor (Posted 08.29.08 3:52 PM) Report Abuse

$1.7 million per car really isn't that much when you consider the cost of ejector seats, underwater conversion sub-marine option and concealed machine guns with uranium enriched armor piercing bullets. As long as Wendy's still has their dollar menu, I could care less what other people make.  

Double Agent Sympathizer (Posted 08.29.08 4:13 PM) Report Abuse

For them to make that kind of salary, while people die of hunger in this country daily is sinful. "To whom much is given, much is expected."

Bigmac (Posted 08.29.08 4:48 PM) Report Abuse

They'll lease........because they need as many business write-offs as possible to counteract their umpteen million dollar salaries.

ProfessorCredit.com (Posted 08.29.08 5:32 PM) Report Abuse

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