Mercedes-AMG GmbH, a 100% subsidiary and the high performance brand of Daimler AG, and Aston Martin Lagonda Ltd. intend to enter a technical partnership.
A corresponding Letter of Intent has been signed today. Essential elements of the planned partnership are supply agreements between Mercedes-AMG, Mercedes-Benz Cars and Aston Martin.
Mercedes-AMG will supply Aston Martin with engines, while Mercedes-Benz Cars will provide the British luxury sports car manufacturer with e/e (electric/ electronic) components for Aston Martin’s future models.
In addition to those agreements, Daimler will receive up to 5% equity in Aston Martin without cash consideration in several steps following the progress of the technical partnership.
At the same time, the company will receive an observer status in the board of management of Aston Martin. Based on the Letter of Intent, both parties intend to work towards signing definitive agreements during the second half of the year. The overall transaction is subject to the conclusion on definitive agreement and applicable regulatory approvals, if required.
Ola Källenius, Head of Mercedes-AMG GmbH: “We are proud to work with Aston Martin and provide them with powertrain and e/e components for their forthcoming sports cars. This is proof of AMG’s technological and performance expertise and a real win-win situation for both sides.”
Aston Martin product development director Ian Minards said: “We have selected AMG specifically as the basis for this powertrain development process. Aston Martin sources cutting edge technology from key suppliers around the globe and the opportunity to include content from Mercedes-AMG GmbH in our next generation sports cars is, clearly, good news.”
Not the least due to competitive reasons, both parties agreed on non-disclosure of further details of the planned partnership for the time being.
The news comes in the wake of Aston Martin Lagonda’s centenary celebrations in Kensington Gardens, London last weekend - an event, at least for some executives - tinged with regrets as to what might have been - see below. Meanwhile, Aston Martin's restoration business in Newport Pagnell is as busy as ever, undaunted it seems by any effects of the recession. Second hand Aston Martins appear to be recession proof.
COMMENT. This is at least the third agreement that Aston Martin Lagonda has undertaken with major vendors; not the least of these was the deal with Magna Steyrhttp://www.magnasteyr.com/investors in Graz, part of Canadian-based Magna International, and which allowed the Austrian company to undertake manufacture under contract of the four-door Rapide saloon for Aston Martin. Although no detailed figures have ever been published of the venture, it is understood this exercise proved expensive and unprofitable for the Gaydon, Oxfordshire-based company. So much so, that manufacture of the Rapide was brought back in house at Gaydon. However, many observers claim the Rapide could have been built more profitably at Newport Pagnell without involving third parties, and with a good deal less embarrassment all round.
Secondly, in 2011 Aston Martin launched the Cygnet, its take on the Toyota iQ. This car likewise has not been quite the unqualified success originally planned.
Observers are holding their breath that for Aston Martin Lagonda, third time will prove lucky. Possibly, in their position of ‘observer status’, Daimler AG officials will have access to Aston Martin’s books and be aware of the company’s future model programmes. Certainly, going forward, Aston will be in need of new powertrains. ∎
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