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Titans Unite: Aston Martin And Mercedes AMG

By raccars Published

Aston Martin has entered into a major deal to source engines from Mercedes, while the German company gets 5% stake in the British sports car manufacturer, in what could be an exploratory step towards a more significant union between the two brands.

The engines involved are V8 units made by Mercedes' high performance arm, AMG, to be used in future models of Aston Martins. Despite an often shaky financial history, the British luxury auto firm appears to have been little dented by the privations of the economic crisis, indulging in a number of showy celebratory events this summer to celebrate its centenary year, while Mercedes is one of the largest and best known brands in the world. There is industry speculation that the new joint venture could herald a takeover by the German company, following its homeland rival, Mercedes, in acquiring an iconic UK marque.

Aston Martin is currently majority owned by a Middle Eastern investment group, which has an uneasy relationship with the other significant shareholder, Italian firm, Investindustrial. While the two companies have agreed to invest a substantial sum into building up Aston Martin over the next five years, both are also likely to be keen to sell for a tidy profit, if an offer arises. Mercedes is one of the few companies considered to have the requisite financial and technological resources to be able to secure a long term future for Aston.

The new deal will supply AM with AMG V8 engines to supplement their Ford sourced V12 range, along with a range of other Mercedes technology such as electric and electronic components. While AM has recently confirmed that it has renewed its V8 and V12 supply contract with Ford for another five years, that engine range is ageing and the company is in need of a more up to date powertrain, to able to develop future models.

Similar to their deal with Ford, Aston Martin will tune the Mercedes engines to their own requirements. Although Mercedes has a selection of homegrown luxury sports cars, the two firms are not really direct competitors, with rather different customer bases and images.

With the new deal, Aston Martin and Mercedes will collaborate on the development of future models for the British firm but manufacture will continue to take place at Aston's Gaydon plant, with a 1,700 strong workforce at present. Negotiations are so far at letter of intent stage, with a firm commitment to signing a definitive contract later this year.

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