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Leveraging Resources Under the Hood

#GeneralMotors #Daimler #MercedesBenz


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What’s interesting about the announcement made last week by Mercedes-AMG and Aston Martin Lagonda—whereby Mercedes-AMG is going to supply Aston Martin with engines, Mercedes-Benz Cars will be providing electric/electronic components, and Daimler AG is getting a 5% equity stake in Aston Martin—is what this says about the potential for small volume manufacturers to exist going forward.

Although the electric/electronic content of vehicles is exploding, at the end of the day, the powertrain is the big challenge in terms of development, manufacture, and emissions validation. Meaning, it takes a whole lot of resources (money, personnel, equipment, lawyers, etc.) to get an engine ready to go under the hood of a production vehicle and to have that vehicle be deemed street-legal.


GM LS3 engine

While much is made of the Local Motors approach to vehicle build--where basically it is low-volume, highly modified and personalized production—it is worth noting that the Rally Fighter comes with an engine from General Motors, the LS3 V8. You can get the structural tubing and the body panels almost anywhere, but the engine has to come from a place where they can afford to do all of that designing, engineering, certifying, and manufacturing.

As Aston Martin’s fortunes are comparatively small in the context of a Mercedes or a General Motors, it is evident that they are picking the spots where they are making their investments.

When the partnership was announced, Aston Martin Product Development Director Ian Minards said, “We have selected AMG specifically as the basis for this powertrain development process. Aston Martin sources cutting edge technology from key suppliers around the globe and the opportunity to include content from Mercedes-AMG GmbH in our next generation sports cars is, clearly, good news.”

Clearly, it is not a bad thing for Aston Martin to be able to say that it has AMG engines powering their vehicles.

What should be noted, as well, is that it isn’t just smaller manufacturers that need to avail themselves of other sources for powertrains.

Next year, for example, engines made in a new Nissan plant in Decherd, Tennessee, will be shipped south to the Mercedes plant in Tuscaloosa, Alabama, for installation in the new C-Class.

As companies look to where they can best leverage their resources, chances are there will be greater partnerships, agreements and other arrangements, which will not only be beneficial to the parties involved, but to customers, as well.