China’s Zhejiang Geely Holding Group increased its grip on Aston Martin Lagonda, as Geely has vowed to invest £234 million, or $295 million, in the legendary British automaker, becoming its third-largest shareholder with a 17% stake.
What Geely will get for its money is 28 million new shares along with 42 million shares from Chairman Lawrence Stroll’s Yew Tree consortium.
“Geely Holding, who initially became a shareholder last year, sees tremendous potential for Aston Martin’s long-term growth and success,” Stroll said in a statement. “They offer us a deep understanding of the key strategic growth market that China represents, as well as the opportunity to access their range of technologies and components.”
Ever the Anglophile
The new Geely investment follows the Chinese conglomerate’s initial Aston Martin Lagonda investment in September 2022, when the company acquired a 7.6% stake at what is thought to have been an investment of $8.5 billion. But Geely Chairman Li Shufu has long been interested in the company, having first peaked under the hood in January 2020, after missing its full-year production forecast, having its bond rating cut to junk status, and lacking funds for their product development program.
But Li Shufu seems to be an Anglophile, as Geely now owns both Lotus and the London EV Co., which makes battery-electric London black cabs.
Who will the next fool be?
That Aston Martin Lagonda needs more money is hardly surprising, as it’s been a constant refrain in the automaker’s history, having survived seven bankruptcies.
Aston Martin was born in 1914, but by 1925, it was in receivership. It was saved by Lord and Lady Charnwood the following year, and would survive through World War II. But soon, it would be financially floundering once more. Industrialist David Brown stepped in and rescued the firm, merging it with the failing Lagonda company in 1947. Modestly, the company’s new models would be named DB.
A new line of glamourous sports cars maintained the company’s health for a time. But the 1960s found them in financial peril once again, and Aston Martin withdrew from racing in 1964. In fact, the automaker was so close to bankruptcy, they didn’t want to loan two DB5s to the producers of the 1964 James Bond movie “Goldfinger.” But cooler heads prevailed, and the company saw success once more.
But by 1972, Aston Martin Lagonda was once more having trouble. Within two years of David Brown’s sale of the business to an investment group, the business entered receivership. Production ceased until 1975, when new owners were secured. With the launch of new models, Aston Martin Lagonda prospered until the mid-1980s.
Ford Motor Co. became Aston Martin Lagonda’s newest savior in 1987, later selling the automaker to a consortium led by David Richards, the chairman of the Prodrive motorsport company and two Kuwaiti investment groups in 2007. In 2013, Daimler secured a 2.6% stake in the company in exchange for giving Aston Martin access to Mercedes-AMG technology.
This was followed by Aston Martin Lagonda’s IPO in October 2018, its shares losing 75% of their value within a year. This led Canadian billionaire Lawrence Stroll and a consortium to gain a 25% stake in the company in 2020. Today, Stroll is the chairman of Aston Martin with Daimler holding a 20% stake. Geely now ranks third.
Geely’s other ventures
Geely’s Aston Martin Lagonda investment comes following a $207 million deal for a 34% stake in Renault Korea in May 2022, as well as a 2.7 billion yuan ($388.77 million) 50/50 joint venture with Mercedes-Benz in January 2020 to build the newest generation of battery-electric Smart cars, designed by Mercedes-Benz.
Geely already invested €7.3 billion ($9 billion) in Daimler AG in 2018, about a year after Geely amassed a 49.9% stake in the Malaysia automaker Proton. Before that, Geely acquired Volvo Cars in 2010 from Ford Motor Co.
Then there’s Lynk & Co., a Chinese-Swedish automaker founded in 2016 selling its 01 plug-in hybrid compact SUV in Europe using a subscription for €550 a month. The automaker is due to arrive in America in 2024, with a model called the EV, which is due to replace the 01 using the same subscription-based sales model. Geely currently sells Volvo spinoff brand Polestar in the U.S., a once independent brand.