Frankfurt - Does the fact that James Bond
drove one with tyre-shredding hubcap blades, machine guns and an ejector seat make the Aston Martin car the ultimate luxury
Or is it the British brand's racing heritage and high
performance credentials that make it an iconic sports car?
That is the question potential buyers will have to address
as struggling US carmaker Ford Motor Co puts Aston Martin on
the auction block.
"Anything is possible," said Stephen Cheetham, car sector
analyst at Sanford Bernstein.
"If anybody decides they want it, the prices start to get
extremely silly. Rationally, it is worth less than $1 billion
and quite a lot less than $1 billion. Irrationally, it may be
worth as much as $2 billion," he added.
"It is one of those assets where you might be surprised
where the interest comes from," said one investment banker who
follows the auto sector closely.
He called Aston Martin an unusual and rare asset that
combines elements of luxury and engineering. He thought a buyer
intent on expanding the brand could pay around $1 billion for
French luxury goods firm LVMH denied suggestions that it or
Swiss rival Richemont could be interested in buying Aston
Martin, which Ford said on Thursday it may sell to raise funds
for other businesses.
While fashionable LVMH head Bernard Arnault may cut a
dashing, James Bond-like figure, his spokesman said a report in
industry publication CAR online he was eyeing Aston martin was
"wrong". Richemont had no comment.
Ford's portfolio of European-based luxury car brands has
fallen well short of its optimistic projections. Its PAG unit,
which includes Jaguar, Land Rover, Volvo and Aston Martin, lost
$162 million in the second quarter before one-off items.
As it loses US market share and high fuel prices undercut
sales of its high-margin sport utility vehicles and trucks, Ford
is still weighing what to do with the other European brands.
Cheetham said he thought German sports car maker Porsche AG
would be an ideal buyer for Aston Martin, a brand positioned
above the classic Porsche 911 model line.
"Porsche have a bit of a conundrum. With all the growth they
are planning they are still moving down market really and they
will be doing well over 100 000 units," he reasoned.
"Aston Martin, with its 4,500 units (in 2005 sales), is much
more exclusive, it's much more premium than Porsche. The two
brands stand for quite different things, but Porsche - unlike
LVMH or Richemont - actually understands engineering."
A Porsche spokesman said buying Aston Martin "is not an
option" for the carmaker with the automotive world's fattest
DaimlerChrysler, whose premium division includes the elegant
Mercedes-Benz and ultra-luxury Maybach limousine brands, also
said it was not interested in Aston Martin.
British machinery group JCB, which said last week it was
interested in Jaguar, ruled out buying Aston Martin.
JPMorgan Chase private equity arm One Equity Partners -
where former Ford CEO Jacques Nasser is a partner - is also
interested in some of Ford's European brands.
In any event, selling Aston Martin is seen as a small but
interesting deal for a sector struggling with slack demand and
chronic overcapacity that stokes margin-eroding price wars.
"This little transaction doesn't really define an industry,
while Renault could," the investment banker said.
He was referring to talks that could add General Motors to
the carmaking alliance between France's Renault and Japan's
Nissan Motor Co Ltd.
Ford is waiting in the wings to meet Renault/Nissan Chief
Executive Carlos Ghosn if the GM talks break down.
Should Ghosn link up with a big US carmaker, "it will make
everyone think about what it means for them", the banker said.
Additional reporting by Michael Smith in London, Marcel
Michelson in Paris and Josiane Kremer in Zurich