Aston Martin and Mercedes - co-op of speed and power begins

Luxury sportscar maker Aston Martin is to team up with Daimler's high-performance Mercedes-AMG division to develop a new generation of bespoke V8 engines for the British firm, it said on Thursday.

Under the deal, which is due to be finalised before the end of the year, Daimler will take a non-voting stake of up to 5% in the 100-year-old British firm, which achieved its greatest fame with the 1963 launch of the DB5 sports car featured in early James Bond movies.

The agreement follows completion of the sale three months ago of a 37.5% stake in Aston Martin to Italian private equity group Investindustrial for $241m (£157m) via a capital increase agreed by the carmaker's majority owner Investment Dar and Kuwaiti compatriot Adeem Investment.

The deals will help Aston Martin, the only global luxury carmaker not attached to a larger manufacturer, to better compete with the likes of Volkswagen's Bentley and Porsche, as well as UK rival Jaguar Land Rover, which was bought by India's Tata Motors in 2008 and has since achieved huge sales growth, especially in China.Under the latest agreement Daimler's Mercedes company will supply engines to Aston Martin, which will also receive electronic components from Daimler's Mercedes-Benz unit, the pair said.The Mercedes deal could eventually replace Aston Martin's current engine supply agreement with Ford, which owned Aston Martin until 2007. Ford makes V8 and V12 engines for the carmaker at its plant in Cologne, Germany.


/The Guardian/