India Watch : Tata Motors puts Italian designs on slow track

The Economic Times, 18th August, 2009

MUMBAI, India — Tata Motors may not join the race to pick up a majority stake in Italian car design firm Pininfarina, contrary to expectations that the Indian carmaker will make a bid to fulfil its plan to have a specialised design company.

The Tatas are not keen because the firm, which has developed cars the likes of Ferrari, Jaguar and Rolls-Royce, has recently lost a number of key people from its design team, people familiar with the development said. Tata Motors, however, is looking at picking up minority stake when Pininfarina opens an Indian centre, a company spokesman said.

The family owners of Pininfarina, which holds 50.6 percent in the design company, recently announced that they are planning to sell a majority stake in the company to prepay debt that totals more than €600 million. The Tatas, with whom the Italian business family has a close association, were seen as top contenders along with French financier Vincent Bollore who is working with Pininfarina on an electric car.

However, recent events suggest that Tata Motors may no longer have an interest in Pininfarina, which designed the Tata Pr1ma, a concept luxury sedan displayed at the recent Geneva Auto Show. “There is no real prowess in Pininfarina after the recent exit of many key Designers,” said an Automotive Design industry insider.

However, recent events suggest that Tata Motors may no longer have an interest in Pininfarina, which designed the Tata Pr1ma, a concept luxury sedan displayed at the recent Geneva Auto Show. “There is no real prowess in Pininfarina after the recent exit of many key Designers,” said an Automotive Design industry insider.

Like any knowledge-centric company, an auto design firm depends on its expert team to gain business. On the other hand, its well-known brand name may still attract Tata Motors to Pininfarina, best known for designing Ferrari models, another industry executive said.

A Tata Motors spokesperson said: “As and when Pininfarina opens an Indian centre, Tata Motors will take a minority stake in it.” He clarified that Pininfarina is not designing any car for the company at present. While French financier Bollore has said he would consider taking a stake in Pininfarina, Indian car designer Dilip Chhabria is keener on picking up talent from the Italian firm.

According to Mr Chhabria, Italian design firms such as Carrozzeria Bertone and Pininfarina are in trouble with liabilities exceeding assets. “Most of such design firms got into contract manufacturing. With auto manufacturers building up their own in-house design and manufacturing teams, these design firms started losing out on business,” he said.

Italian carmaker Fiat bought a bankrupt  Carrozzeria Bertone earlier this month. Pininfarina has been financially weak since the untimely death of its CEO, Andrea Pininfarina, in August 2008. Pininfarina’s latest model is the recently-unveiled Ferrari 458 Italia. Other models it has designed that are currently in production include the Alfa Romeo Brera and Spider.

[Source: The Economic Times via TradingMarkets.com]

Clive Goldthorp

About the Author:

Clive claims that his interest in the BMC>MG story dates back to his childhood in the 1960s when the family’s garage premises were leased to a tenant with an Austin agency. However, back in the 1920s and 1930s, his grandmother was one of the country’s first female Garage Proprietors so cars probably run in his genes! Admits to affairs with Alfa Romeos, but has more recently owned an 06/06 MG TF 135 and then a 15/64 MG3 Style… Clive, who was AROnline’s News Editor for nearly four years, stood down from that role in order to devote more time to various Motor Racing projects but still contributes articles on as regular basis as his other commitments permit.

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