Castlefield Stock Story - AB Dynamics
In the Castlefield headlights this month is an automotive testing company at the forefront of vehicle safety. Investment Analyst David Gorman introduces Bath-based AB Dynamics, held in our Thoughtful UK Smaller Companies Fund.
We hate them sometimes, what with all the hassle and expense, but cars are still a big feature of our lives. Also, many cities around the world are blighted by traffic, with places such as Manila, Mumbai and Jakarta[1] offering drivers and residents nightmarish experiences. Yet there is no sign of people giving up cars, despite the attempts of local and central governments to discourage their use.
We also love our cars and it’s easy to see why. Door-to-door personal transport in our own private space. For some journeys, only the car will do. Vehicles themselves are improving all the time; they are quicker, more efficient, safer and easier to drive than they were even a few years ago. Automotive engineering is at the forefront of technological improvements, as we see with the advent of hybrid and electric vehicles and now driverless cars. On his recent trip to Doha in Qatar, Donald Trump’s presidential motorcade was accompanied by a fleet of cyber trucks, being driven remotely.[2]
Making a significant contribution to technical developments in the automotive industry is AB Dynamics, whose shares we own in our CFP Castlefield Thoughtful UK Smaller Companies Fund. Based near Bath, AB Dynamics (AB) designs, develops, manufactures and supplies vehicle test and development systems, verification products and services for driver assistance systems, as well as autonomous system and vehicle dynamics for the global automotive market. These services help develop vehicles that are safer, more efficient and more sustainable.
AB’s business model is supported by positive external factors including more safety testing of vehicles, more government regulation of road safety and emissions, new vehicles coming to market and new powertrains, e.g. hybrid.
These services help develop vehicles that are safer, more efficient and more sustainable.
AB’s customers include the top 25 global vehicle manufacturers, Tier 1 auto suppliers, all eight Euro NCAP[3] safety laboratories, numerous global test facilities and autonomous vehicle developers. The company operates in Britain, Germany, the US and Asia and it works in three areas: Testing Products, Testing Services and Simulation.
Testing Products is where AB provides laboratory and track testing products and services that enable automotive customers to develop the next generation of steering, suspension, electrical and driver assistance systems. This also includes driverless solutions used in industrial applications, such as large off-road vehicles.
[AB Dynamics] enable automotive customers to develop the next generation of steering, suspension, electrical and driver assistance systems
AB’s Testing Services division supports the vehicle development cycle from concept through to new model launch via laboratory, track and on-road testing services. Services include testing of suspension systems, ADAS (Advanced Driver Assistance System) and vehicle dynamics. This work is done at AB’s California test facility, while laboratory-based climate and thermal testing takes place in Michigan and on-road testing takes place in Europe and China.
In Simulation, the group’s driving simulators and advanced software environments are used by both automotive manufacturers and motorsport teams to speed up vehicle development timescales and allow early experiments to take place virtually before committing to costly, real-world testing.
The company also operates the specialist ABD Solutions division, which is the group’s niche technology accelerator unit. One of its offerings is Indigo Drive,[4] which provides all the necessary software and hardware to drive vehicles remotely. Such a system brings obvious benefits for AB customers who use vehicles in potentially dangerous off-road, environments.
In recent years, AB’s board has made very good acquisitions which have broadened out the service offering and turbocharged growth. For this financial year, order books look encouraging, and we expect to see continued progress.
Written by David Gorman
Information is accurate as at 20.05.2025. Opinions constitute the fund manager’s judgement as of this date and are subject to change without warning. The officers, employees and agents of CIP may have positions in any securities mentioned herein. This material may not be distributed, published or reproduced in whole or in part. With investment, capital is at risk.