Mercedes-Benz takes 20 percent stake in Aston Martin

More tech but no cash for Aston Martin as Mercedes-Benz increases ownership

aston martin mercedes investment

The Aston Martin and Mercedes-Benz relationship has gotten closer, with Mercedes-Benz taking a 20 per cent stake of the famous British marque in exchange for shared drivetrain technologies. 

It’s a natural progression for the two – Mercedes-Benz has shared a number of its engines with Aston Martin since 2013, Aston’s new CEO Tobias Moers is formerly of Mercedes-AMG, and Mercedes’ stake in Aston climbs from its current 2.6 per cent holding.

The deal won’t actually involve a monetary trade for a larger slice of ownership pie; rather, Mercedes-Benz will provide next-generation hybrid and electrified powertrains to the beleaguered British marque.

It also gives Mercedes-Benz bigger economies of scale for its own costly EV research and development program.

What Aston Martin's new boss needs to do to save the companyNew Aston Martin CEO Tobias Moers

In return, Aston Martin will grant Mercedes-Benz new shares in its company in various stages over the next three years.

As of today, the would-be 20 per cent equity stake is worth £286 million (AU$523,265,000).

Further stages of the deal will involve a direct commercial trade for technology packages, with the finer value details still to be decided, but Mercedes-Benz has said it won't take any more than a 20 per cent stake in Aston.

Mercedes-Benz will also install a non-executive board member into Aston’s ranks.

The new plan comes at a particularly critical time for Aston Martin, which is struggling under the weight of a coronavirus-triggered downturn.

In the first six months of 2020, sales were down 41 per cent, selling just 1770 cars. This is despite increased sales for brands like Porsche, Audi and Ferrari.

Extensive spending on a new factory in St Athan for Aston Martin’s first SUV, the much-delayed DBX, also would not have helped the bottom line.

It also shelved advanced plans to roll out a bespoke electric platform under a reborn version of its four-door saloon, the Rapide E, earlier this year.

However, these plans could now be revisited, thanks to its access to Mercedes-Benz's growing EV portfolio. 

This new turn of events was kickstarted by new executive chairman Lawrence Stroll, who installed Tobias Moers as CEO mid-way through the year and formed plans to turn his Racing Point Formula 1 team into a factory Aston Martin squad for 2021.

“Today, we take another major step forward as our long-term partnership with Mercedes-Benz AG moves to another level with them becoming one of the company’s largest shareholders,” said Stroll.

“Through this new expanded agreement, we secure access to world-class technologies to support our long-term product expansion plans.” 

Aston Martin is aiming to sell 10,000 cars and generate £2 billion (AU$3.6b) in revenues by 2025.

 

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