Auto Design

The News.

At first, the news that Volkswagen has bought a 90.1% controlling stake into the famous Italdesign-Giugiaro, surprised – and even shocked – the entire car industry world-wide.

However, a few days later, there was large consensus that the move was a very smart one, benefitting both companies and shareholders, as well as the Turin, Italian, car design community.

On one side Volkswagen has enriched its powerful organisation with a jewel company. An organisation that is unique and paradigmatic in body design and engineering.

Clearly, VW is going to benefit of a design and engineering potential that will enrich and accelerate its product and production expansion in the years to come. A contribution expected to help VW achieve the 10 million units per year by 2018 goal that the German giant has set for itself.

On the other side Giorgetto Giugiaro and his son and partner Fabrizio Giugiaro have signed a long term insurance on the future of their company, that will be granted prosperity by a group of 13 different cars and trucks brands, and few more clients among VW’s associates, such as the Chinese FAW, which has already told Giugiaro (and VW) that they will continue to do business with Italdesign. No doubt, their bank accounts are going to be inflated by the payment for their company.  Details about the selling price are kept very confidential but rumours suggest this was very good indeed. Quite rightly, considering that even through the past difficult years for the industry in Europe and the U.S.A., the company has continued to be successful and flourishing, with top customers and large contracts in its portfolio, such as the one with the BMW Group for the engineering of the new Mini Coupé and Cabrio and the Chino-American Hybrid Kinetics Motors coming to life in Alabama.

In addition, Giugiaro & Son will maintain a fair 9.9% share of Italdesign and their whole stake of Italdesign Architettura, a unit that has always been kept separate from the Italdesign-Group and is not part of the transaction.

On another front, the Italian design community is also going to benefit by the acquisition. Italdesign-Giugiaro will no longer be serving most of the other carmakers around the world and it is likely that most of them will check with major and minor design consultancies in Italy, such as Pininfarina, Bertone, Bee-Studio, Fioravanti, Form Design of Paolo Martin, IDEA Institute, StudioTorino, Torino Design, Trilix,  SZ Design (Zagato), and other ones.

Some Chinese carmakers will probably accelerate their plans to establish their own design centres in Torino or expand the ones they have already there.

The deal was mildly criticized by few voices which said “Italy is loosing another of its jewel to a foreigner” but indeed they had no point and no audience. The Italian car industry (that is the Fiat Group Automobiles) has repeatedly demonstrated to be unable to appreciate the talent, quality and capability of Italdesign-Giugiaro. Despite the evidence that its most successful products in the past decades have indeed been designed by Giugiaro (let’s just mention here the Lancia Delta, the Fiat Panda, Uno, Punto and Grande Punto, as well as the latest Alfa Romeo Brea) the Italian carmaker has consistently snobbed the acclaimed “Designer of the Century” and recently was among the few major carmakers not to have any major project under development at the Italdesign-Giugiaro think-tank.

Indeed, the relation between VW and Italdesign was established long before Fiat noticed the presence of Italdesign in the Turinese design community, next to its gates. The VW and Italdesign working relation dates back to 1969 and has rarely been interrupted. Recently, in 2008, the two companies signed a comprehensive “framework agreement” to co-operate on a wide range of projects, including engineering development of the all-new Volkswagen Up! model family.

Speaking at the Press Conference in Torino, Prof. Dr. Martin Winterkorn, Chairman of the Board of Management of Volkswagen Aktiengesellschaft, stressed that “with this shareholding in Italdesign, we are participating in one of the most renowned design and development companies with one of the richest traditions in the automobile industry. Italdesign is the flagship for creative Italian automobile design and has been instrumental in shaping the face of the automobile industry worldwide. As the creator of the Golf I, Giorgetto Giugiaro laid a new foundation for Volkswagen design in the 1970s,”

He also said “Giugiaro made a name for himself not only with the Golf I, but also with concepts for important models such as the first Volkswagen Passat, Scirocco or the Audi 80.”

Closing his remarks Prof. Winterkorn stressed that “A new era in the strategic partnership between our companies begins today. Italdesign becomes a permanent member of the global Volkswagen family. The Volkswagen Group will be continuing its model initiative over the coming years and will benefit from the capacity and competence of Italdesign. The company will therefore be making an important contribution to our 2018 global growth strategy.”