Mercedes to increase its share in Aston Martin

Closer ties between Gaydon and Stuttgart, as part of a wider refinancing initiative, aim to put the troubled company on a more secure footing and realise a new business plan, also revealed today. This calls for a doubling of annual production and revenue by 2025 on the back of a refreshed range and new Astons including electric and hybrid models.

The aim is to make 10,000 cars a year and achieve £2 billion annual revenue with earnings before tax of £500m by 2025. The last time Aston made a profit was 2018 when it sold around 6,400 cars, with revenues hitting £1 billion. Falling sales since then led to massive losses and a rescue of the iconic marque by Canadian billionaire Lawrence Stroll at the end of 2019.

By upping its stake to a maximum of 20 per cent, a process that will be done in stages, Mercedes will become one of the largest shareholders in Aston Martin. Mercedes has held five per cent since 2013 and already provides technology and engines for the current range, but this new deal represents a significant deepening of their collaboration.

Aston Martin chief executive Tobias Moers said the expanded partnership was a critical step towards achieving Aston’s goals. “The capabilities of Mercedes-Benz AG technology will be fundamental to ensure our future products remain competitive,” said the former head of Mercedes-AMG who replaced Andy Palmer as chief executive as one of the new executives brought in under Stroll to revitalise the company.

Lawrence Stroll said: “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.”

In terms of new models, Aston says the 9-10,000 units a year will be made up of a refreshed range of all current front-engined cars and an expansion of the SUV line-up, currently only the DBX. The new generation of mid-engined Astons will go ahead, with the company saying it will use technology from the Aston Martin Formula 1 team for the new road cars. The first Valkyrie hypercar will be delivered in the second half of 2021. Also getting the thumbs up is the programme of Aston Martin specials, such as the continuation and coachbuilt models.

Aston Martin has also revealed that:

• It has brought down the number of unsold sports/GT cars with dealers by 1,400 so far this year
• Production of its first SUV, the DBX, at the new plant at St Athan in Wales is now running at full speed
• The company is targeting annual capital expenditure of £250m-£300m between 2021 and 2025
• And part of a new cash injection of £500 million will repay the coronavirus business interruption loan the company took out from the UK government

Lawrence Stroll added: “This is a transformational moment for Aston Martin. It is the result of six months of enormous effort to position the company for success to capture the huge and exciting opportunity ahead of us.”