Three Japanese car firms unlikely to bid for Aston Martin

04-Sep-2006 • Bond News

Toyota Motor Corp. and other major cash-rich Japanese carmakers may be looking to expand, but analysts say they are unlikely to pursue a bid for Ford Motor Co.'s Aston Martin brand - reports EasyBourse.

Speculation on possible buyers of the luxury brand has been rife since Ford said Thursday it would consider selling all or part of the unit, which some analysts estimate could fetch as much as $1 billion.

While luxury cars like Aston Martin models generally offer higher profit margins, the three major Japanese automakers - Toyota, Nissan Motor Co. and Honda Motor Co. - are likely to find few synergies with the niche U.K. carmaker.

Analysts also note that Japan's volume carmakers don't have the know-how to offer services for Aston Martin customers and it would take years to develop the skills.

"The customer base is totally different. ... Those who buy Aston Martin cars are ultra rich," Koji Endo, an analyst at Credit Suisse Securities, said.

Toyota is moving to beef up its luxury Lexus brand, but "the categories (of the Lexus and Aston Martin) are totally different. ... It would be hard to expect synergy," said Tatsuya Mizuno at FitchRatings in change of the auto sector.

"It would only add one more brand. That would be meaningless," Mizuno said.

Nissan, which operates the upscale Infiniti brand, is also unlikely to make a bid for the U.K. carmaker as the company and French parent Renault focus on studying a tie-up with General Motors Corp., Mizuno said.

Honda has been reluctant to expand via acquisitions since its 1990 purchase of a 25% stake in the U.K.'s Rover produced disappointing results. In 1994, Honda sold the stake to BMW AG after the German carmaker decided to buy the remaining 75% of Rover from British Aerospace.

Spokespersons at Toyota, Nissan and Honda said they had no comment.

Aston Martin, the British auto maker of cars featured in James Bond films, is grouped with Jaguar, Land Rover and Volvo in Premier Automotive Group, a collection of upscale European nameplates Ford once predicted would generate nearly a third of its operating profit by the middle of this decade.

PAG, however, reported massive losses in three of the past four years, including a $1.6 billion loss in 2005, mainly as a result of losses by Jaguar.

Ford doesn't provide detailed financial statements for Aston Martin.