Mercedes has taken a bigger stake in Aston Martin
Aston Martin is to use more technology from Mercedes Benz, in exchange for Mercedes raising its shareholding in the company to 20 per cent.
The plan calls for Aston to use Mercedes’ engine and hybrid technology and electric systems, as it now does, up to 2027. But it will also gain access to full-electric vehicle tech. Rather than cash payments (Aston doesn’t have much cash these days) Mercedes-Benz will get a gradually increasing ownership in Aston Martin Lagonda, up to a 20 per cent maxium.
Aston’s CEO Tobias Moers said: “The capabilities of Mercedes-Benz AG technology will be fundamental to ensure our future products remain competitive and will allow us to invest efficiently in the areas that truly differentiate our products.”
In other words, customers can’t really tell one electric drive system from another, or one cybersecurity defence system from another. So Aston is better off spending that money in ways that will make an Aston an Aston.
Moers says some 20-30 per cent of the company’s cars will be hybrid by 2024, including a plug-in hybrid DBX and of course the hybridised mid-engined supercars - Vanquish, Valhalla, and Valkyrie.
After 2022, Aston will get access to full-electric tech from Mercedes. Moers says it will mean launching a full EV in around 2025. “It won’t use a Mercedes platform,” however.
The Lagonda All-Terrain electric concept of March 2019 was the first indication of the kind of car they’d build, but since this was delayed during the recent rescue of the company we can assume the final car will be rather different. And also it will now be badged an Aston Martin not a Lagonda.
This new deal provides another breathing space for a company that has had an incredibly rough couple of years, as it collapsed into loss, saw its share price tumble, and failed to sell enough of its bread-and-butter V8 sports cars.
In spring this year it nearly went bankrupt. It looked like the expense of developing the DBX and building its factory would come to nought. But the DBX is now coming down the line and orders are steady.
On the face of it the new plan looks like another fairly desperate move. Aston can’t afford the cash to buy the technology so it gives shares. But in the small print is a clause that if the share value falls by 2022, which is most likely to happen if Aston does badly, Aston must compensate Mercedes. In cash.
However, chairman Lawrence Stroll replies that the deal will make Mercedes tech so deeply integrated into his company that a shareholding is the natural way to do it. And that the falling of the share price is extremely unlikely.
Stroll, whose money and friends’ money rescued the company, said: “We have appointed the industry’s best CEO, rebalanced supply to demand and [cut] costs and successfully launched the DBX. Our long-standing partnership with Mercedes will make them the second-largest shareholder after myself.”
Moers, you will remember, came from a previous job as boss of Mercedes’ AMG division. But he tells Top Gear he didn’t take this job with foresight to the new deal.
Aston has used Mercedes electronics for some years, and all V8 Vantages, the DB11 V8 and the DBX all use the AMG V8 engine. “We’re going to keep our bespoke V12,” Moers assured us. “We’re still working on the hybrid V6 but now we have alternatives. The mid-engined cars will in any case be hybrid.”
The company is showing signs of turning the corner. Losses have been cut in the last quarter-year. Sales are up, not just because of the DBX but because of general demand uplift in China even if COVID is still hitting other regions. Meanwhile there are many fewer unsold V8 Vantages sitting on dealer lots, so the company isn’t having to compensate dealers for, in effect, discounting them.
Words: Paul Horrell
