German premium car firm Daimler is set to take a stake in Warwickshire-based Aston Martin after the maker of Bond cars signed an intention to enter a technical partnership with Mercedes-Benz.
Daimler - which owns Mercedes - will take an equity stake of up to 5% in Aston Martin after the agreement. Both sides have indicated that they aim to sign an agreement in the latter part of 2013.
It's a much needed move for Aston which will struggle on its own to develop new cars and to source new technology.
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In particular, Mercedes will supply Aston Martin with engines (the firm currently uses Ford engines).
In addition, Mercedes-Benz Cars will provide Aston with components for future models. This is a welcome move.
It's been a link up that has been on the cards since the Italian private-equity firm InvestIndustrial took a 37.5% stake in Aston Martin earlier this year with a £150m investment.
InvestIndustrial have good links with Daimler and the investment was expected to lead to a possible tie-up.
And speaking earlier this year, Investindustrial's Chair Andrea Bonomi stated that Aston was indeed in talks with Daimler and "other manufacturers" to jointly-develop engines and electrical components. We're now starting to see the first signs of those discussions merging and a possible tie up.
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Ola Källenius, head of Mercedes-AMG, stated that "we are proud to work with Aston Martin and provide them with powertrain and e/e components for their forthcoming sports cars. This is proof of AMG's technological and performance expertise and a real win-win situation for both sides."
Meanwhile, on the Aston side, Ian Minards (Aston Martin product development director) said that "we have selected AMG specifically as the basis for this powertrain development process. Aston Martin sources cutting-edge technology from key suppliers around the globe and the opportunity to include content from Mercedes-AMG in our next generation sports cars is, clearly, good news."
Aston Martin has indicated that it intends to invest £500 million over the next four years. But in car industry terms that doesn't go very far at all: JLR for example spent over £400m just getting the new Range Rover to market.
So it needs a tie up with a bigger player to access technology and components and Mercedes offers that opportunity.
Meanwhile, Investindustrial, appear keen to keep their stake in Aston for the next decade, so as to give them enough time to rebuild the brand and then sell their stake for a profit.
They took control of the Italian motorbike firm Ducati in 2005 before selling it to Audi (via Lamborghini) in 2012.
Most premium and sports car brands are now part of bigger groups - think Ferrari/Fiat, Lamborghini/VW, Porsche/VW...
At some point in the future I expect something similar for Aston Martin. Perhaps the link up with Mercedes is the first step on that road?