Chinese car giant Geely is increasing its interest in iconic British sports car brands. The owner of Lotus has raised its share in Aston Martin to 17 percent, a little more than a half year after it stepped in, buying 7,6 percent in September last year. Geely is now the third-biggest shareholder of Aston Martin.
The keen interest of Geely in Aston Martin isn’t new. Last year, the company offered to take control of the British legacy brand and proposed an investment of 1,3 billion pounds. Executive chairman at Aston Martin, and billionaire, Lawrence Stroll declined the offer. On today’s share increase, he commented: “Geely can offer us a deep understanding of the key strategic growth market of China as well as the opportunity to access their range of technologies.”
Plenty of cooks
So, the Chines link will bring a double benefit: unlocking the Chinese market, crucial for boosting sales, and accelerating the electrification efforts of Aston Martin. With Stroll, the Saudi public investment company, Mercedes and Geely on board, plenty of cooks are preparing the stew in Gaydon. But as Geely is also the largest single shareholder in Mercedes, these shouldn’t pose an immediate conflict of interest.
As such, Geely is gradually growing into a large umbrella owner for European brands, as its portfolio stretches from full ownership of Volvo, Polestar, and Lotus to substantial stakes in Mercedes and Aston Martin.
Despite an impressive model plan unveiled in recent years, Aston Martin can use all the help it can get, as it has been continuously into loss-making. The company, which was taken over in 2020 by Lawrence Stroll, reported doubling its losses last year as supply chain bottlenecks and spending on the new model line-up.
The company, which turns 110 years in 2023, sold 6 400 cars last year. But when it went public on the stock exchange three years ago, it gunned for 10 000 vehicles per annum, much like its arch-rival Ferrari. No coincidence, as daily operations at the British brand are managed by Amedeo Felisa, ex-CEO of the Italian Cavallino Rampante.
First BEV in 2025
Aston Martin has been burning cash to fight inflation and invest in product launches. It hopes to stop the money drain by the second half of this year. That’s also Geely’s forecast as chairman of Geely, Eric Li, stated that he had “confidence in the company’s growth prospects, its technologies, and its management team”.
The support from Geely will prove quintessential, as Aston Martin is finalizing the combustion engine era of its business model and must prepare for the expensive switch to battery-powered sports cars. With Valhalla, the brand will first step into plug-in hybrid technology before launching its first electric car in 2025. One year later, all models will be electrified.
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