Magna mulls Pininfarina takeover

Canadian-Austrian parts supplier Magna International Inc. is weighing a proposal to buy Italian design specialist Pininfarina S.p.A., three sources with direct knowledge of the matter told Automotive News Europe.

Earlier this month, Pininfarina's quarterly earnings report disclosed that the company could be sold as soon as Dec. 31. But Magna and Pininfarina declined to comment on the likelihood of a sale.

Magna wants to strengthen its position as a global supplier of design, engineering and contract manufacturing, one source said. Pininfarina's design expertise and engineering know-how would augment the range of services offered by Magna subsidiary Magna Steyr, which engineers complete vehicles and builds cars for several automakers at its assembly plant in Graz, Austria.

Magna has bid to take over an automaker, without success. It failed to gain control of Aston Martin from Ford Motor Co. and last year a consortium led by Magna was poised to acquire Opel/Vauxhall from General Motors Co., but the Detroit automaker backed out.

After the Opel defeat, Magna decided to stop pursuing automakers and instead focus on its core business of being a global supplier of parts and services, including contract manufacturing.

Financial struggles

Pininfarina is known for building legendary sport cars such as the 1966 Alfa Romeo Spider and the 1984 Ferrari Testarossa. But the company has struggled financially for years, losing a combined 358 million euros from 2007 to 2009.

In August 2009, Pininfarina hired Banca Leonardo, a Milan-based merchant bank, to sell a 50.7 percent stake held by Pincar, the Pininfarina family holding company. The sale is part of a debt agreement made at the end of 2008 with creditor banks, which canceled 180 million euros in loans as part of the agreement. The banks will get the proceeds from the sale of the stake, which grew to 76.1 percent late last year after the banks canceled another 70 million euros in loans.

Banca Leonardo officials declined to comment on the possible Magna takeover of Pininfarina.

The Pininfarina family's share of the company has shrunk from 55 percent to just 1.2 percent.

Pininfarina, which is listed on the Milan stock exchange, was founded 80 years ago by Battista Pininfarina, the grandfather of current chairman Paolo Pininfarina.

Less debt

Pininfarina has reduced its net debt from 157 million euros in 2007 to 58 million euros (about $78 million) as of Sept. 30. But the company is still losing money. 

For the first nine months of 2010, Pininfarina reported a net loss of 34 million euros, compared with 18 million euros a year earlier. For the full year, Pininfarina expects flat sales, more debt and a larger net loss.

If Pininfarina is sold, the buyer will get a company that is focused on design and engineering, rather than vehicle assembly.

The company still has two Italian assembly plants in Bairo and San Giorgio Canavese, both north of Turin. But Pininfarina will stop production at those factories when it completes the last Alfa Romeo Brera coupe and Spider models this month.

Pininfarina also makes cars in a joint venture with Volvo Car Corp. in Sweden. But the company has an option to sell its stake if Volvo fails to submit a plan this year for its C70 replacement.

Fiat may sell Ferrari stake ahead of Chrysler merger, Marchionne tells analysts

Fiat S.p.A. may sell auto-parts division Magneti Marelli S.p.A. and a stake in supercar maker Ferrari S.p.A. before consolidating Chrysler Group LLC, CEO Sergio Marchionne told analysts. 

“We left Turin with the clear message that Fiat and Chrysler will become one company,” Morgan Stanley analyst Stuart Pearson wrote in a note to clients Monday, after attending a Nov. 12 analysts meeting with Marchionne. “A Ferrari initial public offering and potential Marelli disposal may need to come first, according to management,” said Pearson, who has an “overweight” rating on the stock. Morgan Stanley added Fiat to its “best ideas” list Monday. 

Credit Suisse analyst Eric Hauser was quoted Monday as saying that “Marchionne identified a Ferrari initial public offering and Magneti Marelli disposal as potential sources of cash, without giving a timeframe. 

“Fiat may value Ferrari at 2.4 billion euros ($3.3 billion), Magneti Marelli will be a much tougher asset to dispose of as 50 percent of sales are to Fiat,” said Hauser, who has a “neutral” rating on the stock. “I guess they'll float Chrysler first and then work out how to finance the exercise of options to get to over 50 percent in Chrysler, between 2013 and 2016.” 

Pending stock listing

Marchionne also took the opportunity to explain the advantages of spinning off Fiat's industrial businesses, including Iveco S.p.A. and CNH Global NV. Italy's biggest manufacturer plans to list Fiat Industrial S.p.A. shares on the Milan exchange on Jan. 3, allowing it to focus on reviving carmaking operations. 

Fiat declined to comment on the analyst reports from the meeting, but confirmed the meeting took place in Turin on Nov. 12. 

Writing in a note to investors, USB analyst Philippe Houchois claimed that Alfa Romeo clearly is not for sale because its will play a key role in Marchionne's five-year plan for Fiat Group. Meanwhile, Morgan Stanley's report said that Marchionne confirmed VW's interest in buying Alfa Romeo, but added that the brand would only be sold for a very high price. 

Fiat, which acquired a 20 percent stake in Auburn Hills, Michigan,-based Chrysler last year, has said it will raise the holding to 25 percent by the first quarter and to 35 percent by the end of next year. 

Marchionne plans to take the U.S. automaker public in the second half of 2011.

Alfa 159 a mistake

According to the Morgan Stanley report, Marchionne also admitted that launching the Alfa 159 was a mistake, but he said he is confident that a U.S. built Giulia will be a "true Alfa."

A Fiat spokesman said the company has not decided yet whether to build the Alfa Giulia in Italy or in the United States. According to a Fiat strategic plan unveiled in April, the Giulia would replace the 159 sedan and wagon at the end of 2012.

Lamborghini sees sales dip before new supercar launch

Lamborghini ceased production of its high-performance Murcielago six months ago and will not see sales pick up again before the second half of 2011 with the launch of a successor supercar, its CEO said on Friday.

Lamborghini, a unit of Volkswagen AG's Audi, ended production of the $400,000 Murcielago in May in a move that is bound to hit full-year revenues, Stephan Winkelmann said in an e-mail to Reuters.

"This will surely have an impact on our sales performance. Compared with 2009, we will pay for the absence of the Murcielago this year," he said.

Founded in 1963 by Ferruccio Lamborghini, the company has been hit hard by the global economic crisis.

First-half sales fell 2.6 percent to 152.9 million euros ($216 million), despite continued growth in Asia, after dropping 41 percent to 281 million euros in 2009.

"In general terms, a return to the record levels seen in 2007-2008 will not be immediate, considering the slow demand from markets like Europe and the United States," Winkelmann said. "We see a recovery starting from the second half of next year." Lamborghini sold a record 2,430 cars in 2008.

The Murcielago, which is named after a fighting bull like its famous predecessor, the Diablo, and its cheaper sibling, the Gallardo, is Lamborghini's top-selling 12-cylinder car, with more than 4,000 delivered in nine years, of which 409 were sold in 2009. The last Murcielago left the company's base in Sant'Agata Bolognese, Italy, in May, for a Swiss customer.

Selling for up to 300,000 euros ($424,300) apiece, the Murcielago costs almost twice that of the Gallardo, now the company's only product on offer until the next supercar model is unveiled in Geneva in March 2011.

Looking ahead, Winkelmann said Lamborghini aimed to launch a new model every year and boost investments in new technologies.

A new initiative will be announced in Los Angeles in a couple of weeks, he said.

Lamborghini rival Ferrari, which reported third-quarter revenues of 446 million euros, up 12.6 percent from a year ago, is looking to post near record results for this year, the Fiat unit's chairman, Luca Cordero di Montezemolo, said in September.

Citroen DS9 gets greenlit for China

The ‘French S-Class’ based on the Metropolis Concept is on its way, with petrol hybrid engines and a wheelbase longer than Audi A8.

French giant Citroen is taking its luxury DS range to the next level! The company is set to launch a new flagship saloon to compete head-on with Mercedes’ S-Class, as well as the Audi A8 and JaguarXJ. And Auto Express has learned it will be badged DS9. 

Designed to show just what the upmarket DS sub-brand is capable of, the newcomer will take its lead from the Metropolis concept, which was revealed at the Shanghai Expo back in May. And it will also be built in China. 

Speaking to Automotive News China, Citroen’s head of Asian operations, Gregoire Olivier, said: “The Metropolis will happen, it will become a real car."

“The styling elements will be used for a high-level Citroen to be developed in China. We want to build up the premier line in the country, and this concept is central to this approach.”

The Metropolis uses the C6 executive saloon’s platform, and is 5.3 metres in length – that’s longer than an A8 LWB. It has a 2.0-litre petrol V6 mated to an electric motor, which delivers 460bhp and CO2 emissions of 70g/km. 

A similar powertrain is expected in the DS9, although details have yet to be finalised. Scheduled to enter production in late 2012, the DS9 will be built as part of Citroen’s joint venture with the Changan Automotive Group in Guangdong province.