As soon as you enter Italdesign’s headquarters in northern Italy, you will discover automotive history. Right in the entrance area, visitors will find the “DeLorean DMC-12” with its emblematic gullwing doors, a car designed in the early 1980s by designer and company founder Giorgetto Giugiaro and achieved Hollywood fame in the classic film “Back to the Future”. The design house in the Turin suburb of Moncalieri has been majority-owned by Audi for around a decade and a half, and the Volkswagen Group subsidiary has held the entire stake for ten years. But now Germany wants to separate from Italdesign again, also because of their own financial difficulties. Management in Italy has largely kept a low profile, but employees have continued to speak out. “Employees have long felt part of the VW Group, but now they are disappointed with this treatment,” Gianni Mannori of the Fiom union told FAZ
Italdesign, with its approximately 1,300 employees, does not see itself as a crisis at all, quite the opposite. With record sales of around 330 million euros, net profit fell by around 30 million euros last year. The company works at locations in Italy, Germany, Spain, the US and China. Industrial sectors outside of auto manufacturing have recently become areas of growth.
But now it is known that VW is considering selling the studio, possibly to Indian-American investors or to an Italian consortium formed a few days ago. Crisis-hit VW Group wants to become leaner and is therefore getting rid of peripheral businesses, including companies such as major engine maker Everellence, whose sale process is likely to start soon. Powerco’s autonomous driving unit and battery division could also receive new co-owners. Officially, VW is said to be “actively” managing its investments and seeking an “optimal ownership structure”. The statement about Italdesign is still unclear. Audi has only said that it continues to review the strategic direction of its investment portfolio – it does not comment on speculation.
Many VW models come from Italy
Italdesign is closely linked to VW history. When the company’s model range looked increasingly outdated in the late 1960s and discussions about a successor project to the previously successful Beetle model produced no real progress, the design star of the time, Giugiaro, was called upon. Not long before, he had founded his own business with the company Italdesign, and now he is helping the rapid development of new mid-range models. The first VW Passat with a hatchback was derived from the front-wheel drive Audi 80 on the same technical basis. Giugiaro then designed the first version of the successful Golf model. He also gives shape to various vehicles of the Seat brand as well as other group models.
In 2010, Germany took over about 90 percent of Giugiaro’s design house, which then had about 800 employees, and the remaining ten percent in 2015. The purchase price was not made public at the time. When it went public in 1999, Italdesign was valued at 350 million euros; when the company was delisted a few years later, its value was 215 million euros. When selling Italdesign to the VW Group, Giugiaro also wanted to save jobs at his own company, while other design houses in Turin were in decline.
Indian-American company UST Global is now considered a promising takeover candidate. Recently, he reportedly completed due diligence and submitted an offer for a majority of the shares. But in recent days, additional groups from Italy have positioned themselves: These include industrial company Gruppo Adler, which is also a mid-sized automotive supplier with sales of more than 2 billion euros. In addition, state investment firm CDP wants to support the consortium. This makes it clear who the Giorgia Meloni government’s sympathies belong to: Italdesign must remain Italian. Several former top Italian managers from manufacturers such as Ferrari, Fiat and Magneti Marelli also want to take part. The consortium is said to already have a loan of 50 million euros from Italian banks.
However, time is the most important thing. Due to this uncertainty, around 60 engineers are reported to have left Italdesign. “It is important for Volkswagen not to make hasty decisions,” union member Mannori demanded. Employee representatives criticized bidder UST for having no experience in the automotive sector, but focusing primarily on consulting for digital transformation. There are concerns that capacity in Italy will be reduced.
In contrast, the Italian consortium arrived quite late; The union sounded the first warning about the VW sale in May. The Italian bidder wants to further open Italdesign to other customers, such as Stellantis Group, and at the same time conquer new industrial sectors. Whether VW would approve of Italdesign’s strong collaboration with rival Stellantis is, of course, another matter. Italdesign generates 70 percent of its sales in Germany, only 11 percent in Italy. VW management, clearly wants to make rapid progress. It was recently said that there may be clarity this year.
