Ready to drive a Mahindra Aston Martin?

“The name is Bond, James Bond, and I drive a Mahindra!” What? Well, that just could be the next cheesy line in a Bond movie, if Mahindra and Mahindra are successful in buying up a 50% stake in the legendary British carmaker, Aston Martin.

Ready to drive a Mahindra Aston Martin?

Aston Martin officials have confirmed that the company is in an advanced stage of talks with Mahindra for the stake sale. Initially, Mahindra is expected to pick up a 40% stake in Aston Martin, which would then be extended to 50% for a total cost of about $400 million (Rs. 2200 crore). Mahindra’s offer beat that of an Italian private equity fund, Investindustrial. However, the present large stakeholder in Aston Martin, a Kuwaiti investment house, Investment Dar, has denied it is in talks to sell its holdings in the company.

But it looks like Mahindra is getting strong support from the workers’ union at Aston Martin, Unite. This workers’ union is common to both Aston Martin and Jaguar LandRover – the latter being owned by another iconic Indian company, the Tata Group.  The workers’ union’s only concern is that if Mahindra is successful in buying up a majority holding in Aston Martin, it may jeopardize Aston Martin’s relationship with Jaguar LandRover. The two companies have common testing facilities and some common parts vendors. This concern arises because Mahindra and Tata are rival automakers in India, although here too, there are common vendors to both (such as AVL and Borg Warner).

Aston Martin, a 99-year-old brand, has been suffering because it has not been able to find deep enough pockets to fund a global expansion. If Mahindra buys out Aston Martin, it may be a bit of an awkward proposition though – as M&M is primarily an SUV and tractor maker, which has only recently forayed into cars, scooters, motorcycles and trucks, besides a single brand of car – the Verito – that it managed to get out of its brief relationship with Renault. However, the Aston Martin brand will allow Mahindra to expand to other markets more easily, given that it’s been having a rough time getting beyond tractors in markets like the US. Mahindra also owns a majority stake in Ssangyong of Korea and recently launched the Rexton in India. Also read: Mahindra Ssangyong Rexton launched

For India, Mahindra’s successful acquisition of Aston Martin would mean, some know-how being transferred and hopefully incorporated in future Mahindra products, as well as easier access to a luxury brand and job creation, should M&M choose to move some manufacturing or assembly here, like Tata has done with Jaguar LandRover.

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