AML Share price fall

[RobDown]

Jon39 said:

I agree Rob.
Of course, if they did want to buy AMLGH, all they would have to do is obtain the agreement of the two shareholder groups (total holdings are more than the decisive 50%).

I cannot understand why they would want to. They already have the sporty brand association, with AMG and their (British) Formula One team. Also there is the David and Goliath aspect , where AML profits would not make any difference to Daimler's financial results.

Why do Daimler have 5% holding in Aston Martin? Was it given to them as part of the engine and electronics deal, or did they pay for it? I don't think there is a Daimler representative on the AML board of directors, so the whole underlying reason puzzles me

You’re entirely correct, for Daimler to take over AML they would need the agreement of Invest Industrial et al who have more than 50% and hence s blocking stake. With Invest Industrial recently buying another 3% stake at £10 it seems unlikely that they would sell the entire business at anything other than a big premium to that.

I’m not sure it was ever disclosed as to whether Daimler paid cash for its 5% stake or whether it was just one of the implicit costs of the deal to supply electronics and engines? Maybe if someone had the inclination they could skim through Daimler’s accounts from the relevant period?

ETA: as Minglar says below the original press release from 2013 about the technical partnership does indeed say Daimler were given the 5% stake with no cash consideration changing hands

Edited by RobDown on Sunday 28th July 13:49

[Minglar]

Hi Jon

It sounds like they received a 5% stake for the engines and tech.

“Daimler, which owns luxury brand Mercedes-Benz, struck a deal in 2013 to receive a 5 percent stake in Aston Martin in exchange for supplying engines and electronic components” (copied from a Reuters article, March 2017)

Fwiw, the same article also suggested that the Daimler CEO, Dieter Zetsche, had no interest in acquiring AML.

ETA.....sorry Rob, your reply hit the screen as I was mid way through typing my post!

Best Regards

Minglar

Edited by Minglar on Sunday 28th July 13:47

Edited by Minglar on Sunday 28th July 13:48

Edited by Minglar on Sunday 28th July 13:49

[Veg]

Daimler were always looking speculatively to purchase but they needed reassurance. Unfortunately the auto market is having difficulty with the rate of change of technology and the investment needed plus people aren't wiling to spend large amounts even if through a pcp etc. I have a mate who is paying £1200 a month for his V12V which to me is stupid.

Daimler supply AML with last generation tech and don't share software codes so AML have to modify output/ input signals. AML do a blinding job and I suspect Daimler are impressed but is that enough to buy a prestige brand? If the market was buoyant I would have said yes but not right now...

[nite_narc]

I see a few benefits to MB buying AML.

Maybach/Lagonda

Mercedes have struggled to get Maybach to a sustainable point. For various reasons, it's been a non-starter several times. A takeover of AM also brings the L and this could provide a new brand for existing tech and expertise or a way to create an almost 'ready to go' Maybach. I'd argue Lagonda is the better-positioned brand to occupy the space.

Red Bull/F1/Silver Arrows

This might be the biggest barrier or the biggest benefit. MB could buy AML and cut the Red Bull F1 relationship which would dent (arguably) their closest rivals on the track. This Could provide an issue for the Valkyrie and Valhalla but if MB shut the doors on the One they can finish what Red Bull started with both cars.

AMG/AMR

The product line-up doesn't sit as close as people think. The Vantage is close to the AMG GTR but north of that is reasonably clear space, occupied entirely by AML. And even if there is cross-over it's better to cannibalise sales with your own car. This would be a mirror of Audi owning Lamborghini (or even Porsche) with any crossover seen as one brand shutting out the competition while offering range.

Electrification

AML appears, on the surface, to be ahead of MB in the race to EV sports/luxury cars. The Rapide E may be a good base for much of MB's range to adopt similar powertrains and the Lagonda could be a few steps ahead of that.

I'm sure many will disagree but I think tthe time is right for MB to make a move on AML, and for it to be a mutaully beneficial one.

[JB65]

Let’s be honest, MB is light years ahead of AML on EV and engine technology with deep pockets so no IP value there to buy into.

Brand value limited to MB with AMG and Maybach brand already in play and above all bigger fishes to fry in car land these days with higher cost base through EV and AV development combined with potential sales slump due to both EV dilemma of consumers and potential declining world economy. Adding AML would be an unnecessary distraction.

AML has no engine technology value to Red Bull and given their use of MB engines have not been focussing on it intensively. Non core activities including sponsorship should be cut ASAP, particularly with Honda taking the headlines on the latter.

A takeover by one of the many emerging nondescript Chinese EV car brands would be my bigger fear....

[hornbaek]

JB65 said:

Let’s be honest, MB is light years ahead of AML on EV and engine technology with deep pockets so no IP value there to buy into.

Brand value limited to MB with AMG and Maybach brand already in play and above all bigger fishes to fry in car land these days with higher cost base through EV and AV development combined with potential sales slump due to both EV dilemma of consumers and potential declining world economy. Adding AML would be an unnecessary distraction.

AML has no engine technology value to Red Bull and given their use of MB engines have not been focussing on it intensively. Non core activities including sponsorship should be cut ASAP, particularly with Honda taking the headlines on the latter.

A takeover by one of the many emerging nondescript Chinese EV car brands would be my bigger fear....

Well said. Completely agree.

[SL500UK]

JB65 said:

A takeover by one of the many emerging nondescript Chinese EV car brands would be my bigger fear....

As a matter of interest why would you fear a Chinese business investing into AM?

[JB65]

No issue with Chinese or other investors as long as they have a strategic view and belief on growing and transforming the brand
.

My reference was to acquisition by one of the new emerging EV brands in China that could pick up the brand to feature as a badge on a premium range EV. Needless to say that this would most likely mean a break with the AM we know today...

[Jon39]

Slightly off topic, but there could be a share price connection in the future.

We can see a big change to all electric power gradually taking place.
At present there seems to be a slow take-up by customers, perhaps high prices, heavy depreciation and range anxiety (not helped by Top Gear getting just 45 miles with a Nissan Leaf).
Whether all electric is the final solution, who knows.

Anyway my point is, can you imagine all of the Aston Martin sports car range eventually being electric?
I think I would lose all interest in having one.
What is you own opinion about the desirability of a silent sports car?
Certainly very fast, but without any of the soul and character which we so enjoy now.

[avinalarf]

Jon39 said:

Slightly off topic, but there could be a share price connection in the future.

We can see a big change to all electric power gradually taking place.
At present there seems to be a slow take-up by customers, perhaps high prices, heavy depreciation and range anxiety (not helped by Top Gear getting just 45 miles with a Nissan Leaf).
Whether all electric is the final solution, who knows.

Anyway my point is, can you imagine all of the Aston Martin sports car range eventually being electric?
I think I would lose all interest in having one.
What is you own opinion about the desirability of a silent sports car?
Certainly very fast, but without any of the soul and character which we so enjoy now.

World's changing mate.
I agree that for many of us the idea of a silent electric sports car is not an exciting prospect.
However as a weekend toy or for track events we may possibly still be able to enjoy our non ev cars.
Living in London with a short commute I take the tube, what with congestion charges and parking problems and congestion driving around London is a nightmare.
Even when I go out for an evening I often take a cab so that I can enjoy a drink.
My adult children don't have a car it's not a priority for them, they might hire a car if necessary.

[jonby]

avinalarf said:

Jon39 said:

Slightly off topic, but there could be a share price connection in the future.

We can see a big change to all electric power gradually taking place.
At present there seems to be a slow take-up by customers, perhaps high prices, heavy depreciation and range anxiety (not helped by Top Gear getting just 45 miles with a Nissan Leaf).
Whether all electric is the final solution, who knows.

Anyway my point is, can you imagine all of the Aston Martin sports car range eventually being electric?
I think I would lose all interest in having one.
What is you own opinion about the desirability of a silent sports car?
Certainly very fast, but without any of the soul and character which we so enjoy now.

World's changing mate.
I agree that for many of us the idea of a silent electric sports car is not an exciting prospect.
However as a weekend toy or for track events we may possibly still be able to enjoy our non ev cars.
Living in London with a short commute I take the tube, what with congestion charges and parking problems and congestion driving around London is a nightmare.
Even when I go out for an evening I often take a cab so that I can enjoy a drink.
My adult children don't have a car it's not a priority for them, they might hire a car if necessary.

In respect of your last couple of lines, I've long since had the opinion that the ultimate end game of EV & autonomy will be that most people won't own cars

However that assumes EV has a long term future, which is entirely dependent on not just battery tech improvement in respect of charge times/range/weight but more importantly, a realistic & affordable charging infrastructure. Also, there are surely still to come many reports that EV ownership is overall no better for the environment, especially given that in this country most of the charging is ultimately sourced from fossil powered power stations and I've still read nothing on how all these batteries are going to be disposed of at end of life. On top of that, battery powered vehicles will have a shorter life than ICE powered which means fossil fuel powered factories making more vehicles to replace these shorter life EVs

I suspect the long term future will be tech we don't yet know much about - the charging structure in particular, even if there were a sensible plan, can't be justified to implement & pay for unless we can be certain it's the future for the next 40-50 years

[RichB]

avinalarf said:

Jon39 said:

Whether all electric is the final solution, who knows. <clip>

World's changing mate. <clip> Living in London <clip> My adult children don't have a car it's not a priority for them, they might hire a car if necessary.

But this is a very London centric view of the world. I have 4 adult kids of which three have cars. The one who doesn't drive lives in Maidenhead and works in Bracknell, a journey of 8 miles. His commute by public transport takes 90 mins, seriously that's just ridiculous, I could run that in a tad under an hour in my younger days! The general concern with EVs seems to be range but I accept that for commuting that's not an issue. The real concern is where will millions of people plug the things in? There's usually 1.5 cars per household and there's certainly not 1.5 lamp posts per household. That being one of the daft suggestions on how people in towns will plug in the cars. Unless we have inductive charging on all main roads, batteries that are non-poisonous that do not use finite resources (like lithium), emission free power stations (perhaps nuclear that would get the greens up in arms) I will continue to pour scorn on the concept of EVs. Anyway, I digress

[Jon39]

RichB said:

..... I will continue to pour scorn on the concept of EVs. Anyway, I digress

Digress, not necessarily, Richard.

The point in my contribution, perhaps slightly hidden, was that if we are not keen on an Aston Martin electric sports car in the future, then what happens to the Aston Martin business?

Looking to the future, if the popularity of Aston Martin electric sports cars reduces, then their range would be Aston Martin DBX electric, Lagonda SUV and Lagonda Sedan. Mind you, AP has spoken about profits of the DBX subsidising the sports cars, so maybe the business profitability will be just fine.

[avinalarf]

RichB said:

avinalarf said:

Jon39 said:

Whether all electric is the final solution, who knows. <clip>

World's changing mate. <clip> Living in London <clip> My adult children don't have a car it's not a priority for them, they might hire a car if necessary.

But this is a very London centric view of the world. I have 4 adult kids of which three have cars. The one who doesn't drive lives in Maidenhead and works in Bracknell, a journey of 8 miles. His commute by public transport takes 90 mins, seriously that's just ridiculous, I could run that in a tad under an hour in my younger days! The general concern with EVs seems to be range but I accept that for commuting that's not an issue. The real concern is where will millions of people plug the things in? There's usually 1.5 cars per household and there's certainly not 1.5 lamp posts per household. That being one of the daft suggestions on how people in towns will plug in the cars. Unless we have inductive charging on all main roads, batteries that are non-poisonous that do not use finite resources (like lithium), emission free power stations (perhaps nuclear that would get the greens up in arms) I will continue to pour scorn on the concept of EVs. Anyway, I digress

That's true , but I suspect that most major cities have similar problems to London.
Obviously for more rural locations there needs to be more public transport and / or more infrastructure for the EVs.
As an example of how things change the channel tunnel versus the ferry.

[PantsFire]

JB65 said:

No issue with Chinese or other investors as long as they have a strategic view and belief on growing and transforming the brand
.

My reference was to acquisition by one of the new emerging EV brands in China that could pick up the brand to feature as a badge on a premium range EV. Needless to say that this would most likely mean a break with the AM we know today...

Geely pumped money into Volvo and, the recent Volvo's are all great cars, so Aston could get lucky.

But I think it won't come to that, look at what the Urus did to Lamborghini sales, they doubled with the launch of an SUV, the DBX should do really well for Aston and shore up the share price.

[RichB]

PantsFire said:

... look at what the Urus did to Lamborghini sales, they doubled with the launch of an SUV...

All I can say is that they can't sell many cars then because I've never seen on on the road!

[avinalarf]

RichB said:

PantsFire said:

... look at what the Urus did to Lamborghini sales, they doubled with the launch of an SUV...

All I can say is that they can't sell many cars then because I've never seen on on the road!

Food for thought.....2018 global sales figures.

Porsche
Macan............. .......86,031
Cayenne................,,71,458
Panamera................38,443
911...........................35,573
Cayman/ Boxster.....24,750

Bentley
Bentayga...........................4072
Continental GT coupe.......2841
Flying Spur........................1627
Mulsanne............................547
Continental GT conv..............28

Lamborghini
Total car sales ..........5750
Of which Urus sold ....1761

McClaren
Total car sales............4806

Ferrari
Total car sales ...........9251

[jonby]

RichB said:

PantsFire said:

... look at what the Urus did to Lamborghini sales, they doubled with the launch of an SUV...

All I can say is that they can't sell many cars then because I've never seen on on the road!

plenty of lambos (2 door and urus) around me.....in cheshire

my local high street (Hale) is dominated by 4x4s - Bentleys, Lambos, Range Rovers of all descriptions, Q7s and G class in particular - they are no doubt one of the target markets

none of them can park properly, most are driven by women, a huge proportion have body kits - it's not attractive, but if aston get their product right, it's a bigger market than for sports cars at that price range

my guess is that's partly because however much people like the sports cars, they mostly have families and need the practicality of a 4x4.

[RichB]

avinalarf said:

RichB said:

PantsFire said:

... look at what the Urus did to Lamborghini sales, they doubled with the launch of an SUV...

All I can say is that they can't sell many cars then because I've never seen on on the road!

Food for thought.....2018 global sales figures.

Porsche
Macan............. .......86,031
Cayenne................,,71,458
Panamera................38,443
911...........................35,573
Cayman/ Boxster.....24,750

Bentley
Bentayga...........................4072
Continental GT coupe.......2841
Flying Spur........................1627
Mulsanne............................547
Continental GT conv..............28

Lamborghini
Total car sales ..........5750
Of which Urus sold ....1761

McClaren
Total car sales............4806

Ferrari
Total car sales ...........9251

That's interesting, I can genuinely say I've never seen a Uras on the road. Living near Woking and Egham (Maranello) I often see Ferraris and McLarens, though given the figures above that stacks up.

[Jon39]

jonby said:

..... in Cheshire ..... my local high street (Hale) is dominated by 4x4s - Bentleys, Lambos, Range Rovers of all descriptions, Q7s and G class in particular - they are no doubt one of the target markets, most are driven by women, a huge proportion have body kits - it's not attractive, ......

Very funny Jonby.
If I am quick, I might get in before avinalarf.

Those unattractive women you refer to, with the body kits.

I bet the Cheshire plastic surgeons must be able to afford any supercar they wish for.