A major Chinese carmaker has walked away from the chance to make luxury Aston Martin cars on the mainland, mainly because of disputes over ownership and valuation issues.
The closed-door talks between Beijing Automotive and Britain's Aston Martin Lagonda - famous for the cars used by James Bond in the British spy films - about joint ventures or direct investments have been terminated, according to people familiar with the matter.
Late last year, Beijing Auto, the mainland's fifth-largest carmaker in terms of sales, hired Royal Bank of Scotland to advise it on possible foreign investment opportunities, said the people, who declined to be identified as they were not authorised to speak to the media.
The South China Morning Post broke the news in October last year that Beijing Auto had entered talks with Aston Martin Lagonda because the Chinese carmaker wanted to diversify its product line to meet growing demand from mainland consumers, particularly the middle class, some of whom see their cars as more than a basic means of transport and as a component of a luxury lifestyle.
Beijing Auto already has joint ventures with South Korea's Hyundai and Germany's Daimler, the maker of Mercedes-Benz cars, on the mainland.
"[Beijing Auto] definitely needs more car models, because Chinese consumers are getting more and more sophisticated," one of the people said.
"Some rich families already have their first car for daily use, and now they are looking for a second, perhaps more luxurious, car that they can drive on holidays or on weekends."
Officials at Beijing Auto and Aston Martin Lagonda could not be reached for comment.
Although the hoped-for partnership between the carmakers did not work out, it does not necessarily mean Beijing Auto has given up its ambition of investing abroad. The firm had already tapped investment banks other than RBS to look for new opportunities, the people said.
An American carmaker, which they declined to name, had appeared on Beijing Auto's radar for potential tie-ups, although it was too early to say whether a deal could be reached.
Aston Martin Lagonda, meanwhile, is keeping its door open for other investors.
Beijing Auto had no interest in acquiring the whole company. The state-owned Chinese carmaker was more interested in technology transfer or forming a joint venture to make new car models together, the person said.
Late last year, Xu Heyi, Beijing Auto's chairman, said the company was looking to list its passenger car unit in Hong Kong this year to raise about 10 billion yuan (HK$1.24 billion). The firm is one of the very few unlisted major mainland carmakers.