Mercedes-Benz will take a major stake in Aston Martin as part of a “truly game-changing” strategic technology agreement that will underpin a plan for the British brand to double its sales by 2025.
The agreement expands the existing relationship between the two firms and will include Aston Martin gaining access to Mercedes technology - including electric and hybrid powertrains - that will form a key part of its expansion plans.
Aston Martin said the deal included "powertrain architecture (for conventional, hybrid, and electric vehicles) and future-oriented electric/electronic architecture for all product launches through to 2027."
While the firm declined to outline exactly what products were planned under the new agreement, new Aston Martin CEO Tobias Moers said that the first Aston Martin cars utilising technology from the deal would be launched late next year.
He said that "it needs a little time to get the technology in different products" but added there would be "a kind of product firework in 2023".
With the new agreement in place, Aston Martin has targeted selling around 10,000 vehicles a year by 2025 and is aiming for revenues of around £2 billion and EBITDA profits of around £500 million. For comparison, the marque sold 5862 cars in 2019.
Lawrence Stroll, whose investment consortium completed its takeover of Aston Martin earlier this year, said that the 10,000 sales would be comprised of front- and mid-engined sports cars and "a portfolio of SUV products", hinting at new models joining the recently launched DBX. Around 20-30% of Aston Martin's sales by 2024 will be hybrid models. Stroll said the firm didn't plan to launch a full EV until 2025.
In return for the technology, Mercedes will gradually increase its stake in Aston Martin up to a maximum of 20%, providing a welcome boost in investment for Aston Martin and making the German giant one of its largest shareholders. The technology will be supplied "on commercial terms". Mercedes previously owned around 2.3% of Aston Martin shares as part of a deal that involved its AMG performance arm developing a bespoke V8 for the company.
Stroll called the agreement “a transformational moment”. He added: “Through this new expanded agreement, we secure access to world-class technologies to support our long-term product expansion plans, including electric and hybrid powertrains, and this partnership underpins our confidence in the future.
“This is truly game-changing. We now have the right team, partner, plan and funding in place to transform the company to be one of the greatest luxury car brands in the world.”
Moers, who joined Aston Martin from his previous role as the head of AMG, said: “We have updated our plans for the business, incorporating the benefits of our enhanced partnership we are announcing today. We're targeting delivery of significant growth and margin expansion in the medium term, not just through product expansion but also by incorporating a strategy to deliver a level of operational excellence and efficiency throughout every aspect of the organisation.
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The cost of technology
The investor presentation was very light on detail and strategy and the polite analysts didn't press them. A really important point not picked-up by journalists is that until the share price reaches 64p (it's now 51p), AM will have to pay for the technology, so reaching that level is vital to save their rapidly dwindling liquidity. But, the materials are ambiguous on what 'supply on commercial terms' as quoted in this article means v 'access to these technologies in exchange for shares' also stated in the press release and investor presentation. How much will it cost them if they don't reach 64p? This is critical to knowing how long they can survive, the profitability of their cars and how much money they will have to invest on much-needed facelifts and further SUV developments. Is the supply of engines on 'commercial terms' while the engineering of BEVs is covered by the equity stake? It would be good to have a bit more analysis and something that isnt in the press release.
Symansky, the only changes to
Symansky, the only changes to the AMG engine are external to the engine itself -- intake, exhaust, and a reshaped wet sump so it can be mounted lower. The engine itself is 100% off the shelf.
Pietro, I'm not sure what you mean, but the "VH" Astons didn't start out as Jaguars in any way. I fear that future generations of "Astons" may start out as Benzes, however. Changing their parts won't make them Astons.
A crying shame. Yet more Benz
A crying shame. Yet more Benz in "Astons." No, Autocar, the previous deal did NOT result in bespoke V8 engines for Aston -- they're merely off-the-shelf AMG engines. Great engines, but they have no business being in an Aston. This is exactly what I feared. This deal incudes powertrains, apparently including ICE, not just electric stuff. Platforms are next. So very sad.
Speedraser wrote:
Yes you are entirely correct, AM are much better of sticking with Ford/Jaguar cast off engines.
Unique to Aston.
The i6 and V12 were completely unique to Aston Martin. i6 only used the block, and that's about it. The V12 used all the information from Ford to build a reliable and durable engine. The older V8 (Vantage) was closer to an engine used in a Jaguar but was still absolutelly unique to Aston.
The AMG V8 has unique upper end with heads and cam profiles, I'm told from a source within Aston. It's a great engine, but as Speedster says, it's really too close to a Mercedes engine to be called Aston. Alas the problem now is the costs involved in developing an engine that meets all the emissions criteria.
But Aston are developing a V6 hybrid engine. Expect other manufacturers to be moving to this format too. McLaren have already announced this, and if you were paying attention Ferrari stated they'd be doing this too years back. Although that may now be merged or replaced with a Mercedes engine as they're apparently doing the same.
Citytiger, that’s simply
Citytiger, that’s simply false. Why do you continue to spew incorrect information and perpetuate these rumors? Aston’s 4.3/4.7 V8 was based on the “architecture” of Jaguar’s V8, then was so comprehensively reengineered such that it is entirely, yes entirely, unique to Aston Martin. The block, crank, bearings, conrods, pistons, rings, heads, cams, valves, etc. are completely bespoke and unique to Aston. The production V12 was designed specifically for Aston and was never used in any other production car. Saying they’re “cast offs” is ignorant and incorrect.
Symanski, no, unfortunately the AMG V8 in the new Vantage, DB11 and DBX does NOT have unique heads or cam profiles. It is straight off the shelf – no changes whatsoever to the top end, the bottom end, or anything in the engine itself. Only external things -- exhausts, electronic tuning and oil sump -- are changed. An "Aston" with someone else's engine isn't an Aston Martin.
Hmm...
Firstlly, I do not disagree with you as that was my interpretation of how Aston gets their AMG engines. Secondly, unfortunately I was told that wasn't the case by someone inside Aston!
I'm told it's not directly off-the-shelf, but does have some unique parts to Aston. I'm on the fence with this because by all accounts it's a good engine. But at the same time it does sound far too similar to an AMG.
Sadly I now believe Tobias Moers is the wrong CEO. That he didn't sack Reichman immediately was his first mistake, but clearly his vision is to tie Aston close to Mercedes. I say vision, but I don't think he's a visionary CEO. Just a Mercedes man.
"Triggers Broom"
Just like in "Only Fools & Horses" Triggers broom had several new heads and shafts!
If I took a "Jaguar" house and ripped out the fittings, windows, roof, chimney and added an extension then it is now my "Aston" house, might look like the old Jag but definately my new Aston
The Best isn't Cheap
While I agree that a unique engine would be ideal, the cost of such an engine is far beyond what could be justified. Today's engines and transmissions are so complex, bespoke, low volume engines are for companies that are in a far stronger position that Aston. It's also important to understand that today's engines can be made much more bespoke with much less physical change than in decades past. Hopefully, Mr Moers will initiate some physical changes, but the cost of low volume bespoke development, then homologation for each market, is high. For now, I think they are right to stay with a bespoke exhaust and tweaking the calibrations of what are undeniably magnificent engines that are well aligned with the Aston brand values. Spending money on new engines wouldn't be anywhere near the top of my list of things they need to do to turn the company round.Regarding Mercedes platforms, I'm sure that will happen for the BEVs, and quite right too. Then, perhaps a new role as Daimler's Porsche, using group platforms to create very special motorcars that have a distinct brand feel and a loyal following that makes the group lots of money. Daimler must be looking at VW Group and thinking, why don't we have a Porsche. Maybach is luxury, AMG is the name on the wheels of a C220. People driving an entry level Mercedes with 'AMG Styling' believe they have an AMG, so that brand is blown, and it's still seen as a tuner with little heritage. Aston Martin could be the answer.