Mahindra Will Use Pininfarina To Threaten New Markets.
“Where Pininfarina comes into our equation is they are great at design and style. Where we come in is as industrial engineers.”
Mahindra Group of India wants to use newly acquired and legendary Italian designer Pininfarina to attack new markets in Europe and the U.S. not only in the automotive sector, but in wider sectors of industrial design as well.
Mahindra affiliate, information technology consulting firm Tech Mahindra, will own 60 per cent of Pininfarina and auto making subsidiary Mahindra & Mahindra will own 40 per cent. Mahindra is expanding its auto business and already owns Ssangyong Motor Co of Korea and Reva Electric Car Co. Its products sold in India include the big selling little Bolero SUV and a pricier 4×4, the XUV500.
Tech Mahindra CEO and Managing Director CP Gurnani said in a telephone interview the acquisition of Pininfarina will allow it to provide a one-stop-shop of design services.
In mid-December the Mahindra Group of India which makes planes, cars and tractors, bought troubled, Turin, Italy-based auto design specialist Pininfarina SpA. The deal reportedly is worth about $185 million.
Since the 1930s, Pininfarina has had high profile design success with Italian sports car makers Ferrari, Alfa Romeo, and Maserati, and more prosaic projects with Peugeot of France. Better know designs include the Ferrari 250 GT, Ferrari Testarossa, and the Alfa Romeo Giuletta Spider.
But Pininfarina has fallen on rocky financial times and was unprofitable for 10 of the past 11 years while struggling with large debts. Its problems began because its manufacturing division floundered. This made niche vehicles for mass car makers, but suffered when they moved to cut the number of basic engineering platforms used to produce wide ranges of cars.
Tech Mahindra’s Gurnani said Pininfarina will allow it to provide services to its customers globally across a much wider range than before.
“Where Pininfarina comes into our equation is they are great at design and style. Where we come in is as industrial engineers. If we marry our IT skills with their design and styling skills, we have the opportunity to bring in the software aspects,” he said.
“In mastering the design of tomorrow, we get the opportunity to marry form and functionality, software and hardware, while contributing immensely to product design. With this partnership, we would be among the few design houses in the world that service clients across the spectrum from art to part; or design to manufacture; or styling to product,” Gurnani said.
Pininfarina will be used not just in automotive projects, but in a wide range of more ambitious projects opening up opportunities in Europe and the U.S..
“When I see Pininfarina, in addition to some great automotive designs, I see perfume packaging, buildings, handbags, apparels, notebooks, and I see high-end motorcycles, high-end tractors. Europe has always had a very high sense of aesthetics,” Gurnani said.
$10 billion a year
“Europe contributes to about 65 % of Pininfarina’s business. Tech Mahindra’s effort would be to take that to different parts of Asia and to the U.S.,” Gurnani said.
He said the global market for outsourced automotive engineering services was still huge, worth about $10 billion a year and growing at about eight per cent annually.
Tech Mahindra and Pininfarina would provide a one-stop-shop.
“Pininfarina’s design and styling will complement the existing business of Tech Mahindra. Clients of both companies will now get the full range of services under one roof. This is the perfect marriage – they have skills and we understand the market,” Gurnani said.
Gurnani wouldn’t be drawn on the possibility of new models targeted at Europe and the U.S. But clearly there are big ambitions for the new combination.
“Pininfarina will add enormous value to Tech Mahindra’s portfolio of engineering services, the legendary high-end design credentials of Pininfarina will significantly enhance the design capabilities of the entire Mahindra Group,” he said.