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Mahindra In Race For Aston Martin?

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Mahindra & Mahindra (M&M), India’s leading maker of tractors and sport utility vehicles that also controls Korea’s SsangYong Motor, is supposedly gearing up for yet another bid to expand its global footprint. It was reported over the weekend that the maker of Scorpio, India’s most popular off-roader, had plunged into the race to acquire a significant stake in British luxury carmaker Aston Martin, a cult sports car seen in close to a dozen James Bond films, including the latest Skyfall.

Aston Martin’s current owner, a consortium led by Kuwaiti finance firm The Investment Dar, which bought it five years ago from the Ford Motor Company for $767 million, has been in negotiations with Italian private equity firm Investindustrial which was said to have offered $400 million for a 50% stake. Mahindra was believed to have offered more. None of the parties involved had officially confirmed that talks are on but in a statement to a Kuwaiti newspaper Monday, Investment Dar chairman Adnan Al Musallam denied the proposed sale altogether.

Anand Mahindra, the third generation of the Mahindra clan to chair the auto firm,  has long been looking to spruce up M&M’s image as a maker mainly of low-priced off-roaders. In 2008, it was one of three bidders for Jaguar and Land Rover but lost out to a $2.3 billion offer from India’s Tata Group. In 2010, Mahindra settled for a more modest prize, snatching a 70% stake in SsangYong for $463 million.

While Anand had insisted when speaking to Forbes last year that he didn’t regret being trumped by Tata and SsangYong was a better fit, it seems the search for a luxury marquee wasn’t abandoned. Earlier this year, the tycoon who features among the country’s richest, was eyeing bankrupt Swedish automaker Saab which was eventually sold to a Chinese-owned firm.  Luxury cars are reporting brisk sales in this part of the world where rising wealth is creating an expanding pool of buyers.

“ Mahindra is a company with big global aspirations. Adding a brand like Aston Marton to their portfolio will position them right up there. This deal is more about making a statement than a business fit, “ said Hormazd Sorabjee, editor of  auto magazine Autocar India. That said, Mahindra, unlike Tata which paid top price for Jaguar-Land Rover,  isn’t likely to bid beyond what it believes is a reasonable price for the nearly century-old British brand.

Meantime, Mahindra with sales of $10.6 billion is doing well at home and notching up great gains. Its XUV 500, touted as a global SUV, was the most successful automobile launch of 2011 with 36,000 units sold. It’s newly launched Quanto, a compact SUV, has made a splash as well;10,000 cars have been booked already. Anand, whose favorite car is the Mahindra Bolero, has lately been spotted in a Rexton SUV, made by the Korean subsidiary and recently launched in India. His next car could perhaps be  a 2-door sports coupe.