Pininfarina May Be Sold to India’s Mahindra

Pininfarina Introduces Exclusive New Car "Enjoy"


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Pininfarina’s top shareholder attempted to muffle rumors that it would sell a majority stake to Mahindra, a potential deal that could leave yet another storied Italian brand in the hands of a foreign company.


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One day after Bloomberg reported the Indian truck maker’s interest in the world’s most famous car design firm, Pininfarina said in a statement that its controlling shareholder, Pincar, had neither approved a sale of its 76-percent stake nor were there “binding agreements” between Mahindra and Pininfarina. Pincar, an Italian car dealer owned by the Pininfarina family, confirmed that Mahindra had “expressed interest” and that it was discussing a “possible sale of its share” with the 13 other banks that own Pininfarina. Mahindra is “one of the most important customers for Pininfarina,” Pincar said, as it contracted the firm for SUV development and hired one of its designers to help craft the Mahindra Reva Halo electric-car concept shown in New Delhi last month.


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Earlier this week, Pirelli agreed to sell its tire business to the Chinese government as part of a $7.7 billion deal with the state-owned ChemChina. In 2009, the family-owned Pincar lost majority control under new loan agreements and was rumored to sell Pininfarina to Tata, India’s largest automaker and mega conglomerate that at the time had just bought Jaguar Land Rover.


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In a statement last week, Pininfarina said that it would not meet the earnings goals stipulated by the 2008 restructuring deal and said that it was “working on different assumptions in order to definitively secure the group, by finding the resources necessary for its growth and stabilizing its cash flows with new business and commercial opportunities in the strategic sectors in which it operates.” In other words, a Mahindra deal is not off the table, at all.


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Mahindra Scorpio Pik Up Double Cab


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The Mahindra Scorpio pickup, evidence that the company could use some design help.

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Pininfarina has been losing money for years, despite lucrative contracts with major automakers that included designing and building cars for Ferrari—an arrangement going back to 1950 that ended when Ferrari moved all design and production in-house starting with the LaFerrari. American entrepreneur Jim Glickenhaus, who commissioned Pininfarina for the Ferrari P4/5 Competizione, proposed to fund and revamp the company back in 2007, but the deal never materialized. The tragic death of CEO Andrea Pininfarina in 2008, along with the passing of his father Sergio in 2012, has not smoothed the family’s precarious management over its 85-year-old business.


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BMW Gran Lusso Coupé concept


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Look closely at the badges, and you can tell the BMW Gran Lusso Coupe was not designed by Mahindra.

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According to Pininfarina’s draft statements, in 2014 the company lost €1.3 million ($1.6 million) after grossing $104.8 million. It carried $54.3 million in net debt (effectively wiping out its $29.5 million in cash) and owes another $111 million in loans. Pininfarina’s estimated market cap is anywhere from $135 million to $155 million. So, even after crafting the beautiful Ferrari 458, BMW Gran Lusso, impressive architecture work with Italy’s Juventus football team, Boston’s subway cars, and the hypnotic Coca-Cola Freestyle fountain machine, Pininfarina and its 677 employees aren’t making a profit. (Then again, neither is Tesla. Don’t get us started on that.)


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If Tata’s exemplary oversight over JLR is any example, Pininfarina might even do well under Mahindra. The company (and its Korean subsidiary, Ssangyong) is in dire need of basic aesthetics, let alone the refined craftsmanship associated with Italian design. And as much as the sale could hurt Italy’s pride, we’d hate to see Pininfarina close shop forever.


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