Mahindra & Mahindra, a large Indian automaker that specializes in building SUVs, vans, and pickup trucks, has purchased a 76-percent stake in famed Italian design house Pininfarina for approximately $28 million.
Executives stress that Pininfarina won’t move to India and replace Mahindra’s design department. Instead, it will help pen the Indian firm’s next-generation models, but it will otherwise remain an independent company based on the outskirts of Turin, Italy, and will remain listed on the Milan Stock Exchange. It will also be given access to Mahindra’s portfolio of about 780 clients in 90 countries, a move that is expected to give its business a considerable — and much-needed — boost.
For its part, Mahindra is set to benefit from Pininfarina’s long-established presence in key markets such as the United States, Europe, and, to a lesser extent, China. Mahindra runs a technical center in Troy, Michigan, and it has toyed around the idea of selling trucks in the United States for a couple of years, but has never pulled the trigger. Similarly, its presence in Europe is discreet at best, and sales of the XUV500 (pictured) have largely failed to take off.
Pininfarina has been in dire financial straits since it sold its car-building arm a couple of years ago. It understandably sees the acquisition as a step toward a brighter future.
“[The purchase] will not only strengthen our Italian identity but will open more doors. [Our] global presence and global delivery model will allow us to compete for a larger slice of the business,” affirmed Paolo Pininfarina, the company’s chairman, in a press release.
Mahindra ultimately wants to become Pininfarina’s sole owner, and it will make an offer on the 24-percent of the firm’s shares that it doesn’t own yet in the near future. It has also promised to pay Pininfarina’s creditors over $125 million, and it will invest a further $20 million into the company before the end of next year. When all is said and done, Mahindra will have injected over $185 million into the troubled Italian firm.
Founded 85-year ago, Pininfarina has penned iconic designs for companies like Ferrari, Maserati, Alfa Romeo, Peugeot, and even Rolls-Royce. Its current and former clients haven’t officially reacted to the news of the purchase.