TURIN -- Volkswagen AG will acquire a 90 percent stake in Italdesign Giugiaro S.p.A., VW said today.
The Giugiaro family will retain 10 percent in the 42-year-old automotive styling and engineering company that is famous for designing cars such as the first-generation Volkswagen Golf.
VW CEO Martin Winterkorn said Italdesign will make an important contribution to the automaker's 2018 global growth strategy.
“The Volkswagen Group will be continuing its model initiative over the coming years and will benefit from the capacity and competence of Italdesign," Winterkorn said in a statement.
Italdesign Chairman Giorgetto Giugiaro said his company will have a more secure future within the VW Group.
“We have grown from a small studio to a substantial industrial organization which is able to deal with global automakers. There are times when individual egoism has to step back to ensure the future sustainability of jobs,” he told reporters at a press conference here to announce the VW acquisition.
VW, Europe's largest car company, aims to become the world's largest automaker by 2018 with sales of 10 million vehicles a year, compared with 6.29 million last year. The German-based company needs more designers and engineers to help reach the goal. In 2010 alone, VW Group plans to add 60 models, including upgrades.
VW has cooperated with Italdesign for decades with Giugiaro designing not only the first-generation Golf, but also concepts for important models such as the first VW Passat, Scirocco and Audi 80.
Italdesign is also working on VW's new Up family of minicars.
Work on new Mini variants
Giugiaro said Italdesign, which currently has contracts with other automakers including BMW, will work exclusively for VW Group brands in future. “They have enough brands to fill all our resources,” he said.
For existing contracts, including the engineering for BMW's new Mini roadster and coupe cars, the decision on whether Italdesign will continue with projects is up to clients, Giugiaro said.
“We are ready to complete all the projects we are working on and we will guarantee 100 percent secrecy. It is up to our clients to decide if they want to continue,” he said.
Enzo Pacella, Italdesign CEO, said the company has about another year of work on the Mini roadster and coupe.
Under VW control, Italdesign will be run by a seven-member board of directors, that will include four members from VW. Winterkorn said he and Audi CEO Rupert Stadler will be on the board, together and two other VW group executives. Giugiaro and his son Fabrizio will have seats on the board.
VW did not give any details on the price it paid for a 90.1 percent stake in Italdesign, which has annual sales of more than 100 million euros ($122 million).
VW Chief Financial Officer Hans Dieter Poetsch said the two companies had decided not to make public the price of the transaction, but added that Italdesign had a positive development in the past years despite the global crisis, "so we paid a substantial price for something good.”
VW Chairman Ferdinand Piech, who is a close friend of Giugiaro, was at Italdesign's headquarters in Moncalieri, 15km south of Turin, for the announcement. He did not attend a press conference but was present when Winterkorn and Giugiaro spoke to Italdesign's staff.
Piech spent the summer of 1972 working at the Italdesign to learn about design and engineering from Giugiaro.
Italdesign was co-founded by Giugiaro in 1968 and currently has 975 employees and 800 computer aided design workstations.
VW said it will acquire its Italdesign shares through Audi's Italian subsidiary Lamborghini Holding S.p.A. A VW spokesman said this was being done to keep the company's Italian operations bundled together.