Selling ItalDesign to Volkswagen will mean a very different future for Giorgetto Giugiaro’s company. But maybe the time is right for a change. Mark Bursa reports
So, Giorgetto Giugiaro’s design company has been taken over by a major car maker. There’s no indication of how much VW has paid for ItalDesign, but it won’t have come cheap – Giugiaro was voted ‘Car Designer of the Century’ by a panel of experts in 1999, and the list of cars he’s designed, headed by the VW Golf Mk 1 and the Fiat Uno, reshaped the car as we know it in the 1970s and ’80s.
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Indeed, Giugiaro’s own personal ‘brand’ has outweighed the ItalDesign brand over the years – in Italy he’s every bit as significant a designer as, say, Giorgio Armani. Indeed, I’ve seen Giugiaro ties on sale, and he famously produced an aerodynamic pasta some years ago (specially designed to retain more sauce than yer average fusilli or penne, of course…)
More recently, Giugiaro has been sprinkling magic dust on cars from the emerging markets – something that the company has plenty of expertise at doing. Hyundai’s first four models in the ’70s and ’80s were all Giugiaro-styled, as were three of the first four post-GM independence Daewoos a decade later.
Seat too used Giugiaro to launch its own cars from the 1980s onwards, and last year Malaysia’s Proton announced that Giugiaro would style its next-generation cars. Even the likes of FSO and Zastava hired Giugiaro to design Communist-era cars that at least looked okay – the FSO Polonez and the Yugo Florida/Sana.
Giugiaro was the go-to man for a turnaround. In its darkest days, British Leyland hired Giugiaro, with rather less success, to tart up the dismal Morris Marina. The resulting Morris Ital (largely styled in-house, in fact) was the last car ever made under the Morris brand.
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By GlobalDataThe Ital production line was eventually shipped to China, where it lived on until 1999 as the Huandu CAC6430, made in Chegdu by an obscure division of FAW. And in the 21st Century, Giugiaro’s own focus has been on China – a design centre was opened in Shanghai in 2001, and the first of many various Chinese-brand models that have been styled by ItalDesign, the Brilliance Zhonghua sedan, saw the light as long ago as 1997. Frankly, we’ve lost count of the number of Chinese automakers that have announced that Giugiaro has styled their new models. Clearly, the Shanghai centre has been busy.
Quite what VW is going to do with these parts of Giugiaro’s business is not clear – though it would make sense to keep the third-party work going in the emerging markets, if not for VW’s current direct competitors. A spokesman said ItalDesign would “fulfil the commitments we already have” with companies around the world, citing BMW as an example.
And for sure, it’s unlikely BMW would want to use Giugiaro in the future – the pressure to retain the best stuff for VW and its various brands will be there, and the last thing they’ll want in Munich is design work that Audi or Skoda has rejected.
But given the growing sophistication in the Chinese market, and the growing design for western-branded goods, sticking an ItalDesign badge on the back of a Brilliance or a Chery is good business for all concerned. Especially for VW, as it represents a way to avoid design piracy if you’re selling the designs to Chinese customers.
But maybe VW just wants ItalDesign for itself. VW Group chairman Martin Winterkorn seems to suggest VW pursued the deal as it simply needs more design and engineering capacity to fulfil the ambitious model plans it has defined for the remainder of the decade. “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. “The company will therefore be making an important contribution to our 2018 global growth strategy.”
That involves trying to overtake Toyota as the world’s largest automaker – probably a realistic target given Toyota’s recent woes. Design lead for small car programmes, such as the Up! Range, will be part of ItalDesign’s remit. While Giorgetto may take a back-seat role in the future, his son Fabrizio is likely to stay as hands-on CEO.
ItalDesign has another area of emerging markets expertise that could help plug a hole in VW’s range. The German automaker has struggled to produce low-cost ‘world cars’ along the lines of the Renault/Dacia Logan. Indeed, the lack of a cheap sedan is cited as a reason for VW’s loss of market share in China through the ’00s.
Giugiaro knows how to do low-cost, though. Another notable model in ItalDesign’s recent past is the Fiat Palio/Siena range, which set the benchmark for global low-cost in the 1990s. Given the keys to the VW parts department, might it be possible for ItalDesign to produce a low-cost VW with global appeal? And VW will certainly want to tap into ItalDesign’s China market expertise, to make its existing and future models more appealing to Chinese consumers.
Certainly, the future looks positive for ItalDesign within VW. At least the company has never dabbled with production, unlike some of its Carozzeria competitors. Increasingly, it looks like the Italian design houses will have to look at closer ties with the major automakers if they are to survive. When the recession hit, the first thing European automakers did was bring outsourced production back in house. Bad news for companies such as Bertone and Pininfarina, whose business model was based on manufacturing as well as design and engineering.
Bertone succumbed to the Italian equivalent of Chapter 11 a few years ago, and was eventually saved last year by Fiat. This was fortuitous – Fiat wants a low-capacity plant to build some Chrysler-derived models in Europe. Pininfarina has also struggled, and has had to move away from coachbuilding toward design services, selling its plant, in order to stave off a similar fate to Bertone. IdeA, which never dabbled with manufacturing, seems to be maintaining its independence thanks to a focus on emerging markets – it has designed cars for Tata, among others.
Even outside Italy, companies such as Heuliez of France, Valmet of Finland and MagnaSteyr of Austria have all had to look for new clients as the likes of Porsche and BMW have moved production back in-house to fill under-capacity plants. Even in Germany, Karmann has collapsed, with Magna likely to buy the roof business, and VW probably having to do the decent thing and bail out the rest.
At 71 years old, it’s understandable that Giorgetto might want to cash in on the family jewels. But maybe he’s seen the writing on the wall. This way, he exits with his company in the safest of hands, and his stellar reputation intact.
Mark ‘Coolbear’ Bursa
