Aston Martin is set to team up with Mercedes-Benz’s AMG division to develop a new generation of bespoke V8 engines for the British sports car maker.
Under the deal, which is due to be finalised before the end of the year, Daimler will also take a non-voting stake of up to 5 percent in Aston Martin.
Mercedes-AMG will supply engines to Aston Martin, which will also receive electronic components from Mercedes-Benz.
“The opportunity to include content from Mercedes-AMG in our next generation sports cars is, clearly, good news,” Ian Minards, Aston Martin's product development director, said in a statement. “This points to a very bright future for the company as it starts its second century in business.”
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.
Aston Martin declined to comment on British media reports last month that it recently extended the Ford supply deal for another five years.
MASSIVE CLOUT
“This is a great deal for Aston Martin, which needed a bigger partner, and will give it access to new engine technology and save it a fortune on the massive cost of developing powerful and fuel-efficient engines and electronic systems,” said IHS Automotive research director Christoph Stürmer.
Mercedes-AMG has three families of turbo-charged engines that Aston could choose from - an in-line four cylinder unit, a V8 and a V12 but Thursday's announcement specified the agreement was for the development of V8 powertrains, with no mention of whether the company would develop a new generation of V12 engines.
Aston Martin has struggled for growth since the economic downturn in 2008 and reported a nine percent fall in 2012 profits during which time it sold around 3800 cars - around 10 percent fewer cars than a year earlier. Ratings agency Moody's put its non-investment grade B3 rating under review late last year.
Aston sells some 15 percent of its vehicles in Asia but wants to significantly boost its presence in emerging markets. -Reuters