Thursday 19th December 2013

AMG and Aston Martin tie the knot

AMG says Happy Christmas Aston, gift-wrapped V8s on the way (in return for a five per cent stake)

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Funny, we were only talking about the engine partnership between AMG and Aston Martin the other day and now we've had further news on the deal. And, no, despite one PHer claiming inside knowledge that the collaboration was off it seems it's very much on.

A press release on the Daimler website states "following the signing of a Letter of Intent in July this year, the two companies have continued to work together, exploring opportunities for co-operation and these discussions have resulted in the signing of definitive agreements."

The ink is dry and the deal is done

So, Merry Christmas Aston Martin, you will be getting AMG engines after all! The statement goes on to say that "the technical partnership will allow Mercedes-AMG and Aston Martin to develop bespoke V8 engines supporting Aston Martin's launch of a next generation of models that will incorporate cutting edge technology and newly developed engines combining high performance and fuel efficiency."

In return for access to the latest AMG engine technology Aston Martin is giving Daimler five per cent of non-voting shares and 'observer status' on the Aston Martin Holdings board, joining fellow shareholders Prime Wagon, Adeem Investment and Investindustrial.

This confirms what we were told when we met outgoing AMG boss Ola Kallenius and his successor Tobias Moers earlier in the year, the latter quoted in the release as saying, "We are proud to work with Aston Martin - this agreement is a win-win situation for both sides."

Moers also confirmed that "Mercedes-AMG will provide Aston Martin with engines for their forthcoming sports cars" without specifying exactly which engine the deal is based on. We speculated earlier in the week this might be the under-utilised normally aspirated 5.5-litre V8 we recently enjoyed in the SLK55 but growing pressure for downsizing from markets like China may mean Aston joining AMG in adopting smaller engines. That's 'smaller' rather than 'small', the Germans reportedly working on a tax friendly 4.0-litre turbocharged V8 with the potential to match the 500hp-plus of the outgoing twin turbo 5.5-litre. Additional collaboration on the supply of electronic components is also mentioned as a possible extension of the deal.

[blackchrome917]

I can't help thinking this is wrong somehow.

The engines are great (of that there is no doubt) but I can't help thinking its a downward spiral.