New Delhi: In pursuit of a luxury brand, Mumbai-based automaker Mahindra & Mahindra Ltd has decided to develop and sell products under the Pininfarina brand, an Italian design and engineering company that the Mahindra Group acquired in December 2015 for around $185 million, said Pawan Goenka, the company’s executive director.

“We have not decided what kind of product. (But) we will use Pininfarina brand to potentially develop a product to be sold as a Pininfarina product," Goenka said on Wednesday.

The acquisition of the Italian brand serves three purposes, said Goenka.

“One is what Tech Mahindra, which is a primary owner of Pininfarina, does with Pininfarina in terms of engineering services. Second is direct design and engineering inputs for Mahindra products. Third is to develop a brand new product under Pininfarina brand and grow that brand as a product brand."

According to Deepesh Rathore, London-based co-founder of Emerging Markets Automotive Advisors, the plan is “certainly ambitious but doable".

“If you look at it closely, the styling of luxury cars is edgier and that sort of differentiates them from others. So that part will be taken care of. But the other part is to develop the product, which is a concern. Between itself, SsangYong (Mahindra’s South Korean buy) and Pininfarina, does Mahindra have enough bandwidth to develop a luxury product?" Rathore asked.

Goenka declined to share details of the product, but a person familiar with Mahindra’s plans said that the company may look at the electric vehicle space for the Italian brand. Mahindra makes electric vehicles such as e2o and e-Verito in collaboration with Mahindra Reva Electric Vehicles Pvt. Ltd.

In the past, Mahindra has bid for luxury brands such as Aston Martin, Volvo and Jaguar Land Rover. It now seems to have changed its strategy and decided to grow Pininfarina into a luxury brand by leveraging the Italian firm’s legacy and association with the Ferraris and Maseratis of the world.

Globally, auto firms have followed two strategies to tap luxury car customers. Volkswagen AG bought Audi AG and hyper luxury brand Bugatti, while others such as Honda Motor Co. Ltd, Toyota Motor Corp., Nissan Motor Co. and Hyundai Motor Co. have developed Acura, Lexus, Infiniti and Genesis, respectively, to compete with prominent luxury brands in the world.

Closer home, Tata Motors Ltd bought Jaguar and Land Rover from Ford Motor Co. in 2007. Ford continues to own brands such as Lincoln.

Goenka maintained that Mahindra will continue to look for acquisition opportunities in the space.

“If we get a right opportunity, we will go for such acquisitions. I would say that having a premium brand and having your own core brand does not have rub-off. Mahindra will become a strong brand by what we are doing with the brand and not what we do with Pininfarina. (But) we can make Pininfarina more than just an engineering and design brand. So that will be one of our strategies (to seek luxury)," he said.

Pininfarina has a storied past and is well known for classic designs for Ferrari, Fiat and Alfa Romeo in the 1950s and 1960s, as well as contemporary ones for Bentley, BMW and Maserati. The death of its patriarch Sergio Pininfarina in 2012 and financial trouble dating back to 2008 saw the company being sold.

Rathore said that Pininfarina could work as a luxury brand and find acceptance in Europe. “But would the product be comparable to others, that is a big question", he said, reiterating his initial concern.