Is Aston Martin up for sale?

The rumours are continuing to grow that Aston Martin are scouring the car world for a buyer, despite denials from AML.

Aston Martin has just been voted the coolest brand in Britain – for the 393rd time – and are relishing the kudos that gives the Aston Martin brand. Good news.

Not only are Aston Martin the UK’s coolest brand, but their sales figures for 2010 show they did very well in the teeth of a recession, with sales up by 35 per cent on 2009 at £475 million. Even more good news.

So it could be thought that Aston Martin shareholders – including the Kuwaiti Investment Dar and David Richards – see this as a good time to cash in on their 2007 investment – when they snapped up AML from Ford for around £500 million – before the world falls out of love with expensive cars.

But, as these things often are, the underlying issues are far more relevant than the headlines.

Aston Martin may have turned over almost half a billion in sales to the end of 2010, but they made a paltry £7.5 million profit. Which is about as much as Mercedes would spend on R & D for a new number plate light. And therein lies Aston Martin’s first problem.

Aston Martin still relies on a platform developed with Ford’s money and engines that are basically a pair of V6 Mondeo engines bolted together, and has done for the last decade. Not only do all Aston Martins – except the bought-in Cygnet – look the same, they are all basically the same under the skin too.

And they’ve been the same under the skin for a decade, and it’s doubtful Aston Martin can wring much future out of an ageing platform and an engine that will struggle to meet upcoming emissions regulations.

But with profits of almost nothing – and, it is thought, still carrying debt that is greater than the purchase price from Ford – they don’t have a cat-in-hell’s chance of developing new platforms and engines in-house.

To get round that, Aston Martin has been in discussions with Mercedes to develop and build a new Maybach for the Germans to carry on tickling at the Phantom market in exchange, it is thought, for the Mercedes SLS platform (and others, like the GL and S Class for Lagonda models) and the Mercedes range of engines. But those talks are reported to have come to an abrupt end.

As a result, industry sources are saying that Aston Martin is quietly sounding-out all the big car makers to see if there are any takers for Britain’s coolest brand. Which we’re sure there would be if the price is right, but with Ulrich Bez recently quoted as saying he reckons Aston Martin is worth £2.5 billion – including a debt mountain reckoned to be as much as 100 times net profits – no one wants to play.

Aston Martin appears adamant that the company is not for sale, but it’s arguable there’s not much mileage left in repackaging ageing product in revised skins. They have to have a new platform and access to new engines if they are to survive for much longer.

Perhaps Aston Martin’s best hope for a future is to put out the begging bowl to Tata, which owns Jaguar and Land Rover.

In purely geographic terms, JLR is a perfect fit occupying as it does the same facility as AML at Gaydon. In terms of fit, JLR is probably a very good one too, with the platform for the next XK a potentially good fit for new Aston Martins and the new Range Rover and XJ platforms a good starting point for Lagonda models.

The downside is that there will be reluctance at JLR to return to the times of Jaguar being perceived as AML’s poor cousin, and the silly value placed on AML by Ulrich Bez. Not to mention the pile of red ink on the balance sheet.

But despite that, Tata and Jaguar Land Rover probably offer the best promise of a future to Aston Martin Lagonda which surely can’t survive much longer in the hands of investors.

Which, sadly, has been AML’s lot in life for a very long time.