Mumbai: Pininfarina SpA, the Italian designer of Ferraris and niche vehicles, said India’s Tata group is interested in taking a stake.
Pininfarina said on 27 March that it would sell €100 million (Rs634 crore) worth of new shares to existing investors and French billionaire Vincent Bollore, who had expressed his interest in the transaction. The Tata group has now shown interest in participating in the share sale, the Turin-basedcompany said on Thursday.
Tata Motors chairman Ratan Tata.?The firm signed a letter of intent to take a stake in Pininfarina’s planned Pune facility (Photo by: Ramesh Pathania / Mint)
It was not immediately clear which Tata entity would take part in Pininfarina’s planned capital increase.
Pininfarina has, meanwhile, signed a letter of intent with Tata Motors Ltd, whereby India’s largest truck maker would take a minority stake in the company’s new research, design and engineering centre, to be set up in Pune by the end of 2008.
The facility will provide services to Tata Motors and other Indian and international vehicle makers. The companies did not disclose the stake Tata Motors would hold in the venture.
To decrease its dependence on contract manufacturing, which made up for 80% of its revenues in 2007, Pininfarina is expanding its engineering and design business in fast growing countries such as India.
Setting up a design and engineering centre in low-cost countries such as India is part of Pininfarina’s strategy to improve cost competitiveness, as it tries to bounce back into profitability.
“This agreement (with Tata Motors) witnesses the great attention Pininfarina is dedicating to an emerging and highly developing market such as the Indian one,” Andrea Pininfarina, chairman and chief executive of Pininfarina, said in a statement.
Pininfarina has made some inroads in the Indian market in the past as well. In June 2007, the company signed an agreement with tractor maker Sonalika Group to supply automotive design services. It also entered into a deal with the National Institute of Design in February last year, under which it would provide a three-year cooperation in automotive design activities.