Will Indian Auto Giant Mahindra & Mahindra Buy Pininfarina?

Mahindra & Mahindra Ltd., India’s largest sport-utility vehicle manufacturer and 70 percent owner of South Korean car company Ssangyong Motor is reportedly looking to purchase Pininfarina SpA. According to an article in Bloomberg’s Business News, both companies have been negotiating the terms of the buyout for the past few weeks but nothing has yet been finalized.

It’s no secret that the Italian carrozzeria haven’t fared well in recent years. Bertone was forced to close up shop in a much-publicized debacle last year and Italdesign Giugiaro was saved from the same fate when German giant Volkswagen Group bought it out in 2010.

Pininfarina’s no different. Having designed some of the world’s most beautiful cars the company’s fallen on hard times and neglected to turn a profit in 10 of the last 11 years. The company’s weakest point came following the announcement of Ferrari’s new design center, which enabled the fabled Italian automaker to bring all design activities in-house in 2008. Though Pininfarina still competed on projects, the process was nowhere near as inclusive as it had been when the company designed all cars bearing the Prancing Horse badge.

Like Bertone, Pininfarina also lost out on contracts to manufacture cars for other car companies, which resulted in the closure of its manufacturing arm in 2012. Though the once highly successful Turin-based company still works with auto companies on a consulting basis – Mahindra & Mahindra is actually one of the company’s clients – and the design house has turned to other industrial design projects to help recoup the loss, these activities are not sufficient to keep the company out of the red.

If Mahindra & Mahindra did, in fact, purchase a controlling stake in Pininfarina we’d undoubtedly see a lot better-looking vehicles hitting their showroom floors. Ssangyong Motor and Peugeot Motorcycles SA (which is under Mahindra & Mahindra ownership as of January this year) would also benefit from the tie-up. According to Bloomberg, Pininfarina’s shares rose as much as 10 percent today, lifting the company’s value to 136 million euros ($149 million) on news of the impending acquisition.


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