European buyout group Investindustrial has agreed to pay £150m for a 37.5% share of Aston Martin Lagonda, giving the struggling luxury UK brand a welcome shot of cash.
The manufacturer, which is based in Gaydon, revealed the deal after India’s Mahindra & Mahindra withdrew its bid for the stake. Aston Martin wants to use the new cash to subsidise its plans for £500m worth of investment in new products and technology between now and 2017.
It also desperately needs the cash just to stay afloat. In the year to the end of September, the firm sold just 2,250 cars, which was 20% fewer than a year earlier, and almost a third of pre-recession sales. They were in the order 7,000 cars per year. Revenue this year fell 19% to £305m. So, yes, the cash injection is very welcome indeed.
Chairman David Richards said: ‘[The investment] gives stability to the company and certainty of product planning for the next few years. Without it, development plans would have been slower because with the market as it is at the moment, you have to be fairly cautious about investment.’
Aston Martin currently sells about 70% of its cars overseas, and it has been trying to expand its presence in the rapidly growing Chinese market, where a burgeoning middle class is snapping up celebrated western luxury products.
Investindustrial’s senior principal, Andrea Bomomi, said: ‘We are looking forward to working with the management and 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.’
Perhaps the plans will ‘vanquish’ Aston Martin’s woes.
Check out MT's coverage of who the other bidders were for the Aston Martin stake.
.jpg)
