Geely Automobile Principal Li Shufu is apparently still looking for some good deals after the holiday season, and has his eye on another luxury automaker: Aston Martin.
The Chinese company already holds a controlling stake in Volvo Cars and more than 10% of Daimler AG, and is now eyeing a stake in the British luxury car maker, according to the Financial Times.
Aston Martin’s had a tough year, with profits falling, it recently just cancelled its RapidE electric car, slated to be the brand’s first-ever battery-electric offering because it didn’t have the funds necessary to bring the vehicle to market.
(Volvo, Geely merge internal combustion engine development, production)
Earlier this year, Aston announced that full-year 2019 production would be about 10% lower than originally forecast, at around 6,400 vehicles. It didn’t help when Moody’s cut its rating for Aston stock into junk bond territory, warning the ultra-premium carmaker’s cashflow will make it difficult to fund its aggressive product development program.
If a deal comes to pass, it would be Geely’s third British company. It currently holds a controlling stake in Lotus as well as the London EV Co., which makes London cabs. Geely’s been pretty active in the last year, exploiting the benefits of its ownership stakes in Volvo and Daimler.
In a bid to reduce costs, Volvo Cars combined its engine development and manufacturing operations with those of Geely, resulting in a stand-alone division to produce internal combustion and hybrid engines.
(Geely gets Smart with Daimler)
The new entity will produce powerplants for Volvo as well as Geely, Lotus, Lynk and Proton, Reuters reports. Volvo’s 3,000 employees will be merged with Geely’s 5,000 people, but the partnership will not result in any job losses.
Then just as Daimler’s Smart division appeared to be on the outs with the support of Ola Kallenius, the new chairman and CEO, the company’s largest shareholder, Geely, swooped in and saved the oft-near-death quirky brand.
Geely Motors, which bought a 10% stake last year, jumped in at the last minute to save Smart by forming a new 50-50 joint venture between the two companies to produce the tiny EV in China.
(Q&A: Aston Martin CEO Andy Palmer)
The deal calls for two sides to be equal partners, but production of the Smart EV will be moved to a purpose-built plant in China with the first new vehicles rolling off the line there in 2022.
Interesting