Ford explores sale of Aston Martin
03 Oct 2006
Ford Motor Company announced last month that it is exploring the sale of its Aston Martin luxury sports car brand as a strategic option to earn more cash to finance its North American turnaround plan. “As part of our ongoing strategic review, we have determined that Aston Martin may be an attractive opportunity to raise capital and generate value," chairman and CEO Bill Ford said.
"Since Aston Martin’s dealer network, product architecture and size are distinctly different from other Ford brands, it is the most logical and capital-smart divestiture choice," he added. There is however no assurance that the decision to explore strategic options for Aston Martin will result in any transaction, which would be subject to Board approval. The reason to sell Aston Martin also stems from the fact that its dealer network, design and size are different from other Ford brands, making it the most logical choice for possible sale, Ford explained.
Aston Martin's headquarters, research and production facilities are in Gaydon, England. In July, the company celebrated production of its 30,000th car.
There have also been speculation that Ford would sell its other luxury brands Jaguar, Land Rover and Volvo. But Ford clarified its other Premier Automotive Group brands would remain in the Ford portfolio even though the review of strategic alternatives continue.
"We continue to be encouraged by Jaguar's progress and by the strength and consumer appeal of the Jaguar, Land Rover and Volvo product lineups," Ford said. In reality though Jaguar, Land Rover and Volvo vehicles have registered negative sales in July. Compared to the same month a year ago, Jaguar was down 15 percent, Land Rover 31 percent and Volvo 10 percent. Jaguar has cost Ford in excess of $10 billion since it was acquired 18 years ago. Land Rover is marginally profitable. In any case, selling Jaguar alone is troublesome as it shares very many components and purchasing, including transmissions and engines, with Land Rover.