News Column

Italian Investment Group Comes to Rescue of Aston Martin

Dec. 7, 2012
Aston Martin

Aston Martin, the quintessentially British luxury car brand forever linked with James Bond, received a much-needed financial boost Friday with an investment of 150 million pounds (240 million dollars) by Italian buyout group Investindustrial.

The deal, announced by Aston Martin, gives Investindustrial a share of 37.5 per cent in the independent carmaker, in which Kuwait's Investment Dar is a major shareholder. It values the firm, founded in 1913, at around 750 million pounds, analysts said.

Aston Martin, which has faced competition from rival brands like Porsche and Ferrari, said it would use the funds towards investing more than 500 million pounds in new products and technologies over the next five years.

"With this partnership and the continued commitment of The Investment Dar, we look forward to working with our shareholders as we realise our vision and exciting future plans," said Aston Martin chairman David Richards.

It would allow the company, which marks the 100th anniversary of its foundation next year, to "realize its ambitious growth strategy."

Aston Martin cars are handcrafted in Gaydon, in the county of Warwickshire, in central England, where the company employs 1,600 people. The firm was founded by engineers Lionel Martin and Robert Bamford on January 15, 1913.

The deal, which aims to shore up the finances of the ailing group, was announced after Indian motor group Mahindra & Mahindra pulled out of the competition.

Aston Martin was sold by Ford in 2007 for 479 million pounds to a consortium of Investment Dar and another Kuwaiti investment fund, Adeem Investment.

It has since increased sales in China, its fifth-largest market, but sales in Britain and the United States have flagged due to the global financial crisis.

Investindustrial, which recently sold its stake in high-performance Italian motorbike company Ducati to Germany's Volkswagen, has some experience in "reviving trophy assets," the Financial Times reported.

"We are delighted to form part of this iconic global, but quintessentially British brand," said Andrea C. Bonomi, Senior Principal at Investindustrial.

He said the firm was looking forward to working with Investment Dar to "achieve a similar transformation and rejuvenation that we achieved with Ducati, by expanding the model range and strengthening the dealership network throughout the world."

Adnan Al-Musallam, chairman and managing director of the Investment Dar, said Aston Martin was now in a strong position to pursue its plans for development.

Analysts said the deal gives Aston Martin, which remains one of the few independent luxury car producers in the world, a much-needed cash injection.

The deal comes a few days after rating agency Moody's warned of Aston Martin's "deteriorating liquidity profile" in the third quarter of 2012, which could threaten its credit rating.

Aston Martin has sold just 2,520 cars in the current year up to the end of September, figures showed. Sales were down by 20 per cent on a year ago, and well below the more than 7,000 vehicles sold in 2007.

Aston Martin vehicles have featured in 11 James Bond movies, including the vintage silver DB5 in the latest Bond hit, Skyfall.

For more coverage on the automotive industry, please see HispanicBusiness' Auto Channel

Source: Copyright 2012 dpa Deutsche Presse-Agentur GmbH

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