Chinese Media: Geely Covets Aston Martin

Bertel Schmitt
by Bertel Schmitt
chinese media geely covets aston martin

The (not really) silent bidding for British sports car maker Aston Martin still is undecided. The current favorite appears to be the Mahindra Brothers in India, with an Italian private equity group also interested. Allegedly, there is another courtier, and that is China’s Geely.

Sohu ( translation via Carnewschina) has it that Geely CEO Li Shufu has the hots for the British marque and wants to buy it just like he bought Volvo in 2010. Geely paid $1.5 billion for all of Volvo. Investment Dar Inc from Kuwait wants to sell its 64% stake for some $800 million, which looks comparatively expensive for a boutique firm like Aston Martin.

However, Sohu thinks that the Aston Martin brand is glam enough to “take advantage of the enthusiasm of local governments, and to create financial leverage.” Translation: Aston Martin is a good name to get cheap government credits. Geely did something similar to raise the money to buy Volvo, and Sohu says Geely wants to buy Aston Martin “in Volvo mode.”

One item should give Geely pause: Aston Martin has a few dealers in China, but business is less than brisk, I hear.

Also possible: The intensity of the bidding war is cooling down, to the dismay of the investment bankers. And a Chinese bidder is always good for a rumor.

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6 of 10 comments
  • Dimwit Dimwit on Dec 06, 2012

    Didn't we just have a post that Geely has to come up with $11 billion to run Volvo? Where would they get the running capital to run AM? I think this rumour is factually bogus. Sure Li Shufu *wants* AM, but so would I if someone were to give it to me. Doesn't make me bankable. *sigh*

  • SlowMyke SlowMyke on Dec 06, 2012

    Can we stop selling everything to the Chinese? I'm sure they're great people and all, but seriously they are going to own the world in a few short years. Aside from that, I get the feeling it's going to take a minor miracle for Volvo to be around in 10 years and it's hardly an inspiring thought to think of AM going to the same hands...

    • See 1 previous
    • Kendahl Kendahl on Dec 06, 2012

      Thirty years ago, it was the Japanese who were buying everything they could find in the US. As it turned out, they bought high and sold low. The Chinese may be doing the same. An unprofitable, low volume, luxury car manufacturer doesn't strike me as a wise investment.

  • Tstag Tstag on Dec 06, 2012

    Yep once Geeley mucks up Tata will buy the lot cheap and reform PAG

  • Genuineleather Genuineleather on Dec 06, 2012

    Geely sounds about right. There's a reason no major Western automakers are bidding for Aston: price. For a few hundred million, BMW could snap it up, combine engines, platforms, factories, and dealers with Rolls operations and probably do alright. But for $1 billion+? That's a lot of money to try to make up on just a few thousand cars a year, especially if you can't amortize costs beyond one niche brand.