Pininfarina and Mahindra finally seal the deal
Back in April of 2015, we reported the pending deal between Italy’s Pininfarina, famous for the exquisite designs of oh-so-many Ferraris, and India’s Mahindra, a company, well, should we say, more famous for not building beautiful things. It would seem that all of the details have now been worked out after the boss of Mahindra, Anand Mahindra, announced, “The legendary high-end design credentials of Pininfarina will significantly enhance the design capabilities of the entire Mahindra group. Given the increasing design sensibilities of today’s consumers, product design will greatly influence customer choice.”
The deal sees Mahindra purchasing 76.06% of the stock of the company and thus, of course, a controlling interest. An open letter has also been issued for the remaining shares in a deal that will likely see Mahindra shelling out some US$170 million for the ownership and requiring an immediate cash injection of just over US$20 million to cover operating costs, and also offering guarantee to creditors on the safety of their US$155 million. Not exactly cheap, then, for a boutique manufacturing and design house. But in a move a little similar to the TATA takeover of Jaguar, Mahindra has announced that the company will remain independent and Paolo Pininfarina will remain as the Head of the Board.
Mahindra is a well-known brand in India, but has struggled with its image and styling in international markets. Therefore, it is believed that the deal could give Mahindra a more international footing and stronger connections with more European manufacturers through Pininfarina’s network. Pininfarina will, in return, gain access to greater economies of scale, thus lowering manufacturing costs. The Pininfarina deal is the latest acquisition by Mahindra, after its procurement of Ssangyong and PSA Peugeot Citroen’s motorcycle unit.
Despite an international reputation and history of design excellence, the Italian design house has been operating at a loss for some years and had racked up a debt of €52.7 million. Paolo Pininfarina said: “In a globalised world, entrepreneurship and capital do not need a passport. Being part of the global Mahindra group will not only strengthen our Italian identity but will also open more doors.”
Read also: Pininfarina launches luxury e-bike
Pininfarina started in 1930 and found fame that is largely associated with designing for Ferrari, and also for Maserati, Alfa Romeo, Rolls-Royce, Lancia and others. It is also helping Eurostar redesign its trains. In spite of its widespread work, it was the design house’s inherent connection with Ferrari that made it a household name and established forever its name in the car design hall of fame.
When founder Sergio Pininfarina died in 2012, after having designed some 100 Ferraris, the design house commisioned a one-off Ferrari model based of a 458 Spider, and named it Pininfarina Sergio. It also represented the 60-year relationship between the two companies. The Pininfarina Sergio debuted at the 2013 Geneva Motor Show and was featured in the same show two years later after it was decided that a total of six units will be produced (one for each decade) for a limited run.