Mercedes Benz could buy majority stake in Aston Martin
4 April 2008

Unconfirmed reports from well-placed sources in Germany suggest that Mercedes Benz is looking to buy a substantial stake in Aston Martin. Rumours of a potential tie-up between the two premium marques originally emerged from Kuwait in February. Adham Charonoglu, of Aston’s Kuwaiti majority shareholder DAR, suggested that Aston and Mercedes could collaborate on a range of ventures, from engine supply to entirely new models. It now seems that Mercedes-Benz is taking a much more serious interest. And there is a business link; the Kuwaiti Investment Authority hold a seven per cent stake in Daimler AG. Such a move could also help to secure Aston’s long-term future. A small company like Aston needs to buy in major components from a major automotive brand like Mercedes to remain financially viable. We know the next generation Mercedes SL will switch to a lightweight aluminium platform, presenting an obvious opportunity for Aston Martin to collaborate with Mercedes to develop new models - sharing platforms, expertise and technology. Mercedes-Benz’s current association with McLaren ends next year when the SLR goes out of production. This leaves the path clear Merc to start a new association with a British supercar maker.

Hilton Holloway/Will Powell

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6

5 April 2008

Whether true or not, this news should be welcomed but treated with extreme caution. The last 10 – 15yrs or so have shown that Daimler is incapable of developing brands, and the right cars for these brands, while also not being the easiest firm to get on with.

It’s dictatorial control and poor understanding over Chrysler was a farce, Smart has not been the runaway success which resulted in 3 models being axed, Maybach just turned out to be a producer of a scaled-up and ungainly version of the previous S-Class (although the car was originally going to be called Mercedes Maybach), the development of the SLR with McLaren wasn’t easy and AMG has, until recently, lacked direction. And many of the cars produced by Smart, Maybach, McLaren and AMG have lacked polish, have been a bit rough around the edges and have generally been bettered by rivals.

Ford developed Aston Martin very well and they are now serious player against Porsche, Ferrari, Maserati and Lamborghini. Lets hope all this good work isn’t undone and we end up with misguided, brash and unpolished models. If Daimler has now got its act together, then all they need to do is develop a proper replacement for the Vanquish (which would also be a product replacement for its own SLR) and get more oomph from the Vantage so that is can really tackle the 911 Turbo, F430, GTR and Gallardo. And what about resurrecting the Lagonda brand to possibly replace Maybach as a rival to Rolls and Bentley.

5 April 2008

I don't think Daimler will have complete control over the Aston brand. It is not clear whether or not they intend to buy a majority stake or just a share. Either way it appears to me that a collaboration is under consideration rather than a buy out. This would mean, as the article suggests, that the fruits of R and D are shared out rather than distributed as Daimler sees fit. I think it is vital for the future of Aston Martin that the management understand the brand. In other words the company needs to be left to govern itself, just as Jaguar will be under Tata's ownership.

5 April 2008

The Germans with BMW have shown that they are very good at developing british brands.

Land Rover and Mini are big success stories and Rover would probably have been one too

if the British press were not so xenophobic. Lets face it the resurrection of Aston was

mainly thanks to a German .

6 April 2008

[quote blktoy]

Land Rover and Mini are big success stories and Rover would probably have been one too

if the British press were not so xenophobic. Lets face it the resurrection of Aston was

mainly thanks to a German .

[/quote]

I think you may have got this one round your neck slightly?

Land Rover, whilst under Ford ownership has prospered, but the input from the German side of Ford has been minmal. Certainly you have to credit their UK staff and American money for this. The input from the BMW ownership period was minimal as well.

Rover was never going to happen because BMW were too scared that an improved Rover would take sales from their own vehicles, as well as not having the commitment that was needed for an undoubtly long term plan.

I will agree with you on Mini, BMW have done well, if not somewhat changing the ethos of the original vehicle. Again though I refer to BMW's view on overlap. In this case there was none, so as a seperate brand and with no internal competition, BMW were going to make it work.

As for Aston, yes there was a German in control, and one who I very much admire, but it was again still very much a joint Anglo / American corperation that backed the plans. As much as you may hate it, in today's car world its money that talks, not people.

I wouldn't knock the British press for being xenophobic, they have given a balanced view and are only looking at previous history with the German car makers. Daimler hasn't got a good track record and Chrysler is proof of that, especially at a corperate level.

With regards to the potential link up, I have mixed feelings. Aston does need a larger engineering partner. Gone are the days when a small / medium sized car company could flourish and take on the big boys. With regulations for crash protection, emissions, etc, etc, etc, it is expensive to create a car, so buying in certain componentary is the way to go. Certainly from this point Mercedes are good, and anything they would bring to the party would be of a quality nature. But that is where the link should end. Aston management should still be allowed to make the decisions, do the re-engineering and building the cars to an "Aston" standard, or we will just see another arm of Mercedes. And that can only be a bad thing.

 

 

It's all about the twisties........

6 April 2008

'TegTypeR' I think 'blktoy' is referring to Land Rover's Range Rover which Ford paid BMW to fiinish off the engineering and development of at acquisition in 2000. Yes it later was converted to Jaguar/Ford powertrains but the original design, development and engineering work of this well-regarded vehicle was under BMW's ownership.

He is basicaly right too about Aston Martin where along with Ian McCallum's great designs(one basic design iterated??) it was Dr Ulrich Bez, ex-Porsche, BMW that drove its engineering renaissance and who I understand is still its CEO.

There are caveats too about your statement of 'Land Rover prospering under Ford ownership'. It took Ford more than ten years from 1989 acquisition to turn around Jaguar's woeful production engineering and poor product quality. It entailed too closing Browns Lane, which Ford manufacturing execs described as second only to Russian auto plants in its antiquatedness. Jaguar of the last few years has come top or at worst in the top five marques for J D Powers's independent new product quality and overall satifaction surveys. In contrast, Land Rover after merely seven years of Ford's ownership and six by BMW before that, still was flat bottom last in the same surveys. The main Solihull production plant, unlike Castle Bromwich and ex-Ford Halewood was still at time of Ford's sale to Tata a byword for poor assembly assembly quality, a reputation it has held going back to the days of the Rover SD1 East Works plant(32 years).

As to overlaps and linkups, re Aston Martin with Daimler, bear in mind that Aston's engines are currently hand-made at Ford's Cologne engine plant, an arrangement that must be in doubt into the medium term. As a niche, sub 10,000 annual output company they will have to buy in their powertrains. Furthermore, I do not agree that BMW deliberately kept Rover at bay during its ownership due to 'in-house' competition concerns. The strategy was quite clear based on fwd and rwd platforms and Rover low-to-middle priced products and BMW middle-to-high priced products. The fact that BMW Group today has a 1 series 'competing' with MINI, i.e. there is a large overlap in their price ranges, and yet both ranges are extremely successful gives the lie to this in-house competition thesis. What matters in the end is simply product desirability and integrity. Looked at objectively the BMW 1 series is an overpriced, comparatively cramped C-class size car, that is bettered by the VW Golf and even Audi A3 for value for money and bang for buck, and yet it's a runaway success, prompting Mercedes-Benz to rejig its A/B Klasse models to compete.

As to Daimler and Chysler, there's a story about Chrysler design engineers and buyers mocking Mercedes' equivalent for being overcharged by their seat suppliers by five times compared to what Chrysler paid their seat suppliers. Once the Mercedes engineers and buyers had fully examined the Chrysler seats they replied that, no, it was the Chrysler seat supplier that was overcharging Chrysler five-times for the(implied piece-of-shit) that they were buying in. There lies the fundamental, cultural(?) difference between the two companies and ultimately why the tie up failed. The Chrysler 300C is still one of its most successful models over here in Europe and that's off of a generation old E class platform - tells you someting. There were a lot of analogies between Daimler/Chrysler and BMW/Rover.

6 April 2008

[quote loather]He is basically right too about Aston Martin where along with Ian McCallum's great designs(one basic design iterated??) it was Dr Ulrich Bez, ex-Porsche, BMW that drove its engineering renaissance and who I understand is still its CEO.[/quote]

I am not disagreeing with blktoy with regards to Dr Bez, and I have to say he has done a brilliant job at Aston. My point is more that he is one person and regardless of where he came from, the overall strings were being pulled by the Anglo / American management. Indeed if this had not been the case then Aston wouldn't have been sold.

Yes, you are also completely correct also in saying that it is company culture that caused the breakdown between both BMW/Rover and Daimler/Chrysler, and certainly nothing to do with nationality - indeed if this were the case then Lamborghini would not still be under VW/Porsche tenure at this point in time. Again my point was more the fact that Daimler have not got a particularly good track record with joint ventures. Certainly I appreciate when companies amalgamate both sides need to bend to accommodate each others cultures. This may be possible with Aston because of it's CEO and his track record with German industry and philosophy, but this is not to say it is a good thing for Aston.

As I think you will agree, the motoring market now is more concerned with perceived quality / image rather than actual, a point you made about the 1 series. Where I say prosper - and this was where I didn't make myself clear before perhaps - is in perceived image. Certainly if there was a quantifiable way of measuring such a thing you would see that both Land Rover and Jaguar are now further up the charts than they were ten years ago. It is besides the point that their manufacturing facilities are somewhat sub standard (something BMW also didn't sort out under their tenure of Land Rover either), because the average customer on the street doesn't give a damn how its built (process) rather than the finished article. Again I will agree, Land Rover still isn't great - but it doesn't stop them being sold in large quantities and perceived as good vehicles.

I will take issue however in your statement that the Mini and 1 series are cars that compete in the same bracket. Whilst their prices overlap, they certainly do not appeal to the same audience. I am also sure that BMW do not see it in the same way either. As a generalisation (and I mean this in the loosest of ways, so please don't break this down), the Mini is perceived as a "fun", where as the 1 series is "youthful". You just need to look at their marketing campaigns to see where they are aiming.

With regards to Rover, yes there was a lower to medium price vs medium to upper price ideal behind the whole venture, however BMW had problems cultivating this relationship. Regardless of which wheels they drove, the 75 and 3 series were too close in the market place for comfort. I also get the feeling (and this is just a feeling, not based on any facts) that BMW felt moving Rover down market would have been too much hastle.

Certainly none of my comments or opinions are based on nationality. It was blktoy who referred the the British press as being xenophobic (well, I refer to motoring press - I won't comment on the tabloid press as they seem to have their own standards) and I wanted to point out that it was not this drove their comments of potential poor relations.

 

 

It's all about the twisties........

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