In a non-cash deal, Daimler AG will supply Aston Martin Lagonda Ltd. with technology and engine development in exchange for as much as a 5% non-voting stake in the British luxury sports car maker. The AMG performance division at Mercedes-Benz will jointly develop engines with Aston Martin for AM’s next generation models. Daimler also will get a non-voting observer on Aston Martin’s board of directors. Aston Martin currently buys engines from Ford Motor Company, an artifact of the time when Ford owned AM. The Aston Martin V12 is based on the Ford Duratec V6 and Aston’s V8 engine is based on the Jaguar V8, funded by Ford when it owned that luxury marque as well.
“This agreement is a real win-win for both sides,” Tobias Moers, head of Mercedes-AMG, said in a statement cited by Bloomberg.
Aston Martin is currently the only the only global luxury car maker that’s not part of a larger manufacturing group with which it can share development and component costs so it’s looking to control development costs of the new models.
In addition AMG supplying engine development, the companies are looking into other possible areas of cooperation including Daimler providing Aston Martin with electronic components . Today’s agreement formalizes a tentative deal reached in July. Earlier in the year, Aston Martin announced that it was going to invest 500 million pounds ($819 million) on its operations over the next four years. The century old car maker sold 3,800 cars last year.