AutoBeta(AutoBeta.net)01/11 Report--

Geely's global expansion plans are continuing, and Geely is in talks to invest in Aston Martin, following Volvo, Lutes and Daimler. If the acquisition is finally completed, it will be another world-famous deal for Chinese car companies.

Geely is looking to invest in British century-old luxury car brand Aston Martin and has held talks with investors and management of the company, the Financial Times reported.

Geely is conducting due diligence to consider buying a stake in the UK group, which needs new capital, according to people familiar with the matter.

Aston Martin, which listed on the London stock exchange in October 2018, rose 20 per cent on the news.

Due to sales data, declining performance and financial difficulties, Aston Martin confirmed negotiations with strategic investors. Aston Martin said earlier that the company was "still in discussions with potential strategic investors, which may or may not involve equity investments in the company" and that we will make further formal statements in due course.

Geely is not the only investor interested in Aston Martin. In December, foreign media reported that Canadian billionaire Lawrence Stroll was preparing to bid for a large stake in Aston Martin, giving it a controlling stake of 19.9%. According to Lawrence Strol, Aston Martin's share price is now low due to lower-than-expected sales and earnings data, and Aston Martin's share price will grow rapidly in the coming years with the help of brand rebranding and new product launches.

Lawrence Strol, the father of F1 driver Lance Stroll and owner of the Racing Point F1 team, has a fortune of more than 2 billion pounds and ranks 877th on the 2019 Forbes list of the world's billionaires.

Lawrence Strol is likely to expand his stake by buying from Aston Martin's existing majority shareholders or on the open market, according to people familiar with the matter. If Lawrence Strol invests first, Geely will seek a stake in Aston Martin.

However, the current claims of all parties are not the final result. A person familiar with the matter also said that the outcome of Geely's negotiations could be technical cooperation rather than full investment. It is worth noting that Germany's Daimler supplies engines and technology to Aston Martin, while Geely owns about 10 per cent of Daimler and is Daimler's single largest shareholder.

Neither Aston Martin nor Geely commented.

Aston Martin is a British sports car manufacturer, which was founded in March 1913 and has a history of 107 years. It became a wholly owned subsidiary of Ford Motor Company in 1994 and changed hands again in 2007. Aston Martin's largest shareholder is the European Strategic Investment Group, which owns more than 30 per cent of Aston Martin.

Since listing on the London Stock Exchange in October 2018, Aston Martin has had a tough time, with its share price down 80%, poor sales and a quagmire of losses, forcing the company to issue bonds to raise more money.

According to financial information, Aston Martin made a pre-tax loss of 92.3 million pounds (834 million yuan) in the first nine months of 2019, compared with a profit of 23.9 million pounds in the same period last year. The company said the poor performance was due to weakness in the UK and Europe, as well as weak demand for Vantage models. According to Aston-Martin CEO Andy Palmer, the brand delivered 5819 cars in 2019, down 7 per cent from 2018.

In 2019, Aston Martin officially launched its first SUV model, the DBX, which costs 2.378 million yuan in the Chinese market and will be delivered in mid-2020. The car will compete with Bentley Tim Yue and Lamborghini Urus. Aston Martin is pinning his hopes on DBX, expecting sales of the new car to nearly double after its launch, forecasting annual sales of 4000 to 5000 units, helping the brand revive.

For Geely, joining Aston Martin will help boost the group's reputation in the global market and will be an important part of the company's global vision. Geely holding Group has five business segments, including Geely, Geometry, Lecker, Proton and Lutes, while Volvo has Volvo and Polar.

Geely Holdings is also the single largest shareholder in Daimler in the global market, so Geely Holdings and Mercedes-Benz have set up a smart global joint venture to jointly develop the next generation of pure electric smart models, which will be put into production in China, and the first pure electric vehicles will be put on the market from 2022. After becoming the largest shareholder of the British sports car brand Lutes, Geely has introduced it into domestic production and will start production at Geely's Wuhan Hannan plant in the future.

If Geely becomes a shareholder in Aston Martin, there may be more possibilities for cooperation in the future.

Geely sales figures show that total sales in 2019 were 1.36156 million vehicles, down about 9% from the same period last year, just meeting the annual sales target. At the same time, Geely has a sales target of 1.41 million vehicles in 2020. Geely's auto alliance is forming.

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