Filed under: Euro, Aston Martin, Ford
Let the bidding begin: Aston Martin's first suitors revealed
That didn't take long, did it? Apparently Aston Martin is a hotter brand than we thought, as CAR online is reporting that two European luxury good firms, neither with experience in the automotive industry, are both interested in the marque. Swiss-based Richemont, who you might know by its Cartier brand of French jewelry and watches, and French holding company LVMH, best known for its Louis Vuitton and Fendi brands of luggage and hand bags, are the two companies that could potentially pay up to $1 billion or more for Aston Martin.
The eventual buyer is going to get the Aston Martin name, the company's factories at Gaydon and Newport Pagnell, the entire R&D team and the brand's management including CEO Ulrich Benz.
[Source: CAR]
_opt_thumbnail.jpg)
Reader Comments (Page 1 of 2)
Tim UF 12:13PM (8/31/2006)
Ah... Louis Vitton upholstery...
it will be like the LL Bean Outback,
or the Eddie Bauer Fords...
only with little LV's all over the place
Reply
DJ 12:16PM (8/31/2006)
My money's on BMW buying Aston Martin. Only upside for them on this. Gives them another, yet slightly lower priced, British ultra-luxury marque to go with Rolls. Gives them a state of the art manufacturing facility that specializes in aluminum construction. And best of all, gives them a true Porsche/Lambo/Ferrari fighter.
Reply
rwdmtparkingonly 12:27PM (8/31/2006)
If either get Aston it will be interesting to see if they can rely so much on their suppliers for development that they do not need the R&D resources that a mass market auto company can spread across its brands.
A lot of marketing, advertising and posturing, heavy focus on seasonally changing designs, and Chinese sweat shop manufacturing might not work as well for cars as it does for purses, at least not yet.
Reply
joshj 12:27PM (8/31/2006)
I think this is actually quite good for Ford. Granted, Austin Martin is a completely separate entity, I still feel that the big blue can only make pickups and sedans that middle America seems to want.
So it seems that Austin Martin isn’t really an asset to the big blue oval anyways. It’s only a shame the Volvo mark might be in the same boat sometime soon.
Perhaps some Silicon Valley investors could pick up Austin Martin like they did with Tesla….
Reply
KAS 12:29PM (8/31/2006)
DJ is right!
Reply
DJ 1:18PM (8/31/2006)
By the way, did I mention that they ger Ulrich Bez too? Formerly head of R&D for both Porsche and BMW. Easy integration when the guy in charge knows his way around the office already.
Reply
TC 2:10PM (8/31/2006)
@DJ
BMW should take over and get Chris Bangle to design the new Aston complete with ultra high tech i-Drive system.
Reply
Adam 2:49PM (8/31/2006)
If either LVMH or Richemont get it, look for the deal to basically involve Ford keeping the R&D & the production side of the business while the luxury goods firm market the brand.
I'd rather Aston be sold to either an existing car manufacturer (BMW?) or an entrepreneur who turns it back into a small niche producer.
Why did Ford think mass producing an Aston Martin was a good idea? maybe LVMH can give them a lesson on brand dilution
Reply
JZeke 4:24PM (8/31/2006)
Thats actually brilliant, and why not?
If LMVH or the like bought Aston, why not an Italian boat company someday and even a private jet concern? No one knows the rich better than those who sell to them exclusively.
I could see a non-auto manufacturer buying into this, however I hope they understand the labor costs involved in producing bespoke luxury automobiles. An Aston V12 is not a Louis handbag and cant be produced for cheaper in the Phillipines.
Reply
Nick 4:43PM (8/31/2006)
BMW is a good idea. I also thought about Toyota. What does Louis Vuitton or Cartier know about running a car company. They might be able to make better interiors, but it would probably be the same old Aston Martins. BMW and Toyota both have the money and are well run companies that build quality cars, but I think Toyota would do more with it.
Toyota doesn't have a sports car brand. Aston Martin's are hand made, but Bentleys are supposed to be hand made too. You don't hear people complaining about their Continental GT's. Toyota would make Aston Martin into a beast. It can be had for about $1-2 billion. Toyota probably spent more than that developing the Camry. If Toyota doesn't do this they are retarded. This wouldn't cost them 2% of their market cap, and they could make Aston Martin even more profitable than Lexus is within 10 years. Toyota should buy at least a stake in the company and let Louis Vutton buy part of the company too. Toyota's quality, Louis Vutton’s style. Wow.
Toyota would have to start making V12’s, but on the other hand, they would have bought their way into the world of Ferrari, Porsche, and Lamborghini, which that Lexus GT might not be that succesful at.
Reply
glacia00 4:48PM (8/31/2006)
The automotive industry behaves so much like the fashion industry that it's surprising that there isn't a greater overlap between them.
Reply
john 5:28PM (8/31/2006)
A private equity group is going to buy Aston Martin.
They are all the rage these days in buyouts.
Reply
Spectacular Bid 5:39PM (8/31/2006)
If I was part of the Aston Martin leadership I'd be begging to be acquired by BMW long before a host of other would-be buyers. They have the deep resources from skilled people to immediate capital to the racing devotion to ensure the brand doesn't die.
It would be a shame, for example, if another Russian millionaire bought them up like TVR was.
I think the suggested $1B US price is amazing - who would ever pay that much for a low volume automaker even with a sterling reputation? Yes their designs are fresh now, factory is updated and tools/stamping et al is modern so the new owners *could* delay massive investments.
Still it would many decades, without a single more dime invested, before the new owners even get a portion of that back. Keep in mind VW paid a fraction of that for Lamborghini, then pumped in over a hundred million and now will make (profit) just a bit over a million a year.
Hey if buyers [including the fashion companies] are that hot to buy a luxury auto brand why not snatch up say a DeTomaso SpA for next to nothing? Or offer $50M for TVR, thus giving the tyke an easy exit from owning the money losing company.
Reply
AMcA 8:50PM (8/31/2006)
This is absurd. Ford is in the position where the world expects it to hack off a limb. So they are chosing the smallest one. An only recently very successful one. One that leverages Jaguar's technology to build expensive, profitable cars.
There's no bloody reason to dump Aston Martin, except to satisfy conventional wisdom. I hope Billy Ford has the backbone to defy conventional wisdom.
Reply
marko 10:24PM (8/31/2006)
#12 - a private equity company will buy Aston Martin - it's called BMW. Sounds very plausible indeed.
Reply
The Brain 8:53AM (9/01/2006)
Lamborghini is owned by VW and it is barely profitable, but the same thing could be said for VW. There is more to making a profitable company than selling expensive cars. You have to sell alot of them at a lower price than what it costs to make them. It helps to be well managed. There are only so many companies that are well managed, BMW, Toyota, and Porsche are the most well run companies in the world. Each of those companies has the benefit of being both profitable and being considered the best at something. Right now this is not true of Aston Martin right now, but if either of those companies were to buy Aston Martin with being the best at something as a goal.
Reply
georgejetson 7:30AM (9/02/2006)
"Why did Ford think mass producing an Aston Martin was a good idea?"
Hey, Adam, study history: Aston Martin is profitable now for the FIRST TIME IN ITS ENTIRE HISTORY (which dates back to the early 1920s). It's always been a money-losing rich man's plaything/labor of love. Now it's a thriving company. Doesn't that seem like a good idea?
Reply
Adam 10:09AM (9/02/2006)
Not really no. Ford diluted Aston's brand by all these 'entry models'.
The PAG meant Ford had a Porsche-competitor brand in Jaguar. Aston Martin was meant to be the high end brand, competing with Ferrari/Bugatti/Bentley/etc. Think you can find a better marketing hook than being James Bond's car for so many years? They had heritage, style and sophistication. While Ferrari had exciting designs they were the toys of the nouveau rich, too gaudy to take Aston's place as the gentleman's car of choice.
Ford should have given the entry level AM's to Jaguar and help beef up their image. Leave Aston Martin as a small niche builder, up the prices to make a profit, the market can afford it.
But no, Aston sells entry level cars, Jaguar doesn't sell anything and now Ford needs an exit strategy for both.
Reply
xmnr 12:34AM (9/03/2006)
Aston makes a profit. a tiny one, but that means it's earning its keep. its KEEP...
unlike the rest of ford.
it would be a dumb dumb move to sell aston martin. I feel like Ford wants to be free of extraneous drivetrains or something.
With the LS and thunderbird dead, Land rover, jag, and ASton are the only ones using the 3.9-4.4-small displacement v8s. DEw98 that was formed for those cars only lives on in the S-type and the severely divergent mustang. So those bonds are already broken. These ties that go more than skin deep are faltering... Ford I think is trying to avoid the bmw-esque production post-sale cooperation BMW had to endure when it sold Land Rover to Ford, leaving the Ford-owned RR with BMW drivetrain and associated parts and suppliers, as well as when BMW was supplying drivetrains for the Silver Seraph and Arnage "green label" after it lost the rights to both.... Amazing that BMW bounces back from such setbacks. Maybe the purchasing bodies in those transactions didn't mind having someone else "building" their cars for them, but can you imagine someone taking ownership of Jaguar and keeping the 3.0L v6 in a few of those models, or keeping the S-type or X-type at all?
I think aston is safe... I think pretty much everyone thinks those are solid...
Reply
jamie 1:49PM (9/03/2006)
Inside word is that CEO Ulrich Bez is planning a management buyout of Aston Martin. Bez is likely to front a consortium bidding for the luxury sports car maker.
However Ford's decision to put Aston Martin up for sale may just be a disguised invitation to tempt a stronger car maker into an alliance and get some external support for its recovery noted a Global Insight automotive analyst.
Reply