Lamborghini buys Giugiaro

The sale of ItalDesign-Giugiaro, the Turin-based designer of landmark cars such as the original Volkswagen Golf, the AlfaSud and the DeLorean, was announced at its Turin headquarters by founder, Giorgetto Giugiaro this morning.

Volkswagen AG Chairman, Dr Martin Winterkorn (left of picture, with Giugiaro), said he needed the company's expertise to help VW reach its goal of becoming the world's number one car maker by 2018.

Guaranteeing no job losses at the privately-owned ItalDesign-Giugiaro, Dr Winterkorn said the companies already knew each other intimately, with Giugiaro having designed the Golf and the Scirocco, and VW brands having been customers of the group for more than 30 years.

While the first public fruit of the collaboration will be the new Volkswagen Beetle, its designers will soon be working with Bugatti, Bentley, Skoda, Seat, Audi, Lamborghini and Porsche.

"ItalDesign enjoys an exceptional image in the automotive world, which is why we signed a framework agreement in 2008 to buy the company," Dr Winterkorn said.

"It is just magnificently managed already. That won't change. We believe the current leadership will continue to play their vital role without any change."

While its day-to-day management will be unchanged, ItalDesign-Giugiaro will have a new board, consisting of Dr Winterkorn, Audi Chairman, Dr Rupert Stadler, and Giorgetto and Fabrizio Giugiaro.

"ItalDesign-Giugiaro remains a symbol for Italian design and creativity and at the same time it becomes part of a world class group and its talents will be at the disposal of our brands," Dr Winterkorn said.

However, while ItalDesign-Giugiaro will honour its existing commitments to other car companies and areas of industrial design, Dr Winterkorn warned it might soon be too busy to work outside the VW Group.

"The integration of ItalDesign-Giugiaro is a further milestone with our group strategy until 2018. Our brands this year will launch 70 new models in the market and we will widen our range further.

"I can tell you that our product pipeline is full to the brim, and that's why ItalDesign's talents are an ideal partner for us now.

"Their designers have worked through the entire spectrum from small cars to sports cars to SUVs and to lorries. I see it as the creative centre of our group and it's also a strengthening link for the designers in our brands.

"ItalDesign will only work for the VW Group in the future. The resources are what they are and that's all we can do," he said.

Wholly owned Volkswagen subsidiary, Lamborghini Holdings S.p.A., has taken control of 90.1 per cent of ItalDesign-Giugiaro, with Giorgetto Giugiaro and his son, Fabrizio, retaining 9.9 percent.

But Audi Chairman (and Lamborghini Holdings President), Dr Stadler, was quick to point out that the structure didn't mean ItalDesign-Giugiaro would report to Lamborghini.

"ItalDesign will not answer to Lamborghini Automobili. It is a strategic holding that belongs to Audi. VW Group Italy is also part of Lamborghini Holdings, but it does not answer to Lamborghini either."

The secretive design and engineering studio, which often has teams working simultaneously for rival car makers, will now turn the bulk of its attention on the stream of new models emerging from the Volkswagen Group, Giugiaro said.

Yet while long-term rival design houses, Pininfarina and Bertone, have been stricken with financial woes, Giugiaro insisted ItalDesign-Giugiaro was under no financial pressure to find a partner.

ItalDesign-Giugiaro employs around 900 people and turned over €127.7 million in 2007, €135.7 million in 2008 and €107.6 million last year, however its 2009 operating profit was down to €700,000.

"Pininfarina and Bertone's problems did not influence our decisions at all," Giorgetto Giugiaro insisted.

"Our decision was made pretty fast because if you have a strategy about where you are and where you want to go it makes it easier.

"It was also easier because we don't have any financial problems, so we were not under that kind of pressure.

"We witnessed a drop in turnover due to the Global Financial Crisis, but we didn't have the need to do this.

"Actually, we had a portfolio that offered us an excellent bargaining and negotiating position."

It was this position, couple with a long-term personal friendship with VW Group Chairman, Ferdinand Piech, that saw ItalDesign reject parternship offers from emerging markets such as China in favour of joining VW.

"We always worked for VW with design and it was our decision who we wanted to be with.

"There were many offers to join their groups as shareholders but we chose our future.

"There is a very old friendship with Ferdinand Piech. When you have to make a step to make your company more stable and stronger for the future in an uncertain world, that makes it easier because you have trust.

"We are in a good situation but looking at the future we wanted partners that offered a guarantee of stability for our employees.

"We have a skin bond, as they say in Italy. The skin feels right to touch."

ItalDesign-Giugiaro is most famous as a design studio, with more than 200 production models and 50 million Giugiaro-penned cars on the world's roads. Some of its benchmarks include the Alfa Romeo 159, the original Lotus Esprit, the Lancia Delta, the Audi 80, the BMW M1, the Daewoo Matiz, the Maserati 3200GT, the Alfa Romeo Brera, the Bugatti Veyron and the Lamborghini Gallardo.

Yet, three quarters of ItalDesign Giugiaro's turnover comes from its prototyping, testing, validation and production engineering businesses, and one of its major accomplishments in this sector is the current-generation MINI Cooper.

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