Yesterday, we reported that Mahindra, makers of the legendary Thar, were in talks to buy Pininfarina, the legendary styling house and designers of some of the most beautiful cars ever built. Today I spoke with a source close to the deal, and learned some interesting things — and I'm making one very exciting guess.

In speaking to my source, it became clear that there's a number of things left out by the Bloomberg story that are worth mentioning. First, the deal isn't just with the Mahindra Group, the car-and-SUV making company — the deal would also be with Tech Mahindra, a huge IT and engineering services company.

This is significant because it's important to remember that Pininfarina is not just a company that designs beautiful cars — they're also heavily invested in automobile production (especially auto body production), manufacturing techniques, and general automotive R&D. In fact, they had one of the first full-size wind tunnel for automotive research back in 1972. GM didn't even have one until 1980.


Tech Mahindra is also a big player in automotive engineering, IT, and consulting, which suggests that a lot of the reasons why Mahindra is looking to purchase Pininfarina is well beyond the beautiful cars we've seen them design for Ferrari, Lancia, Alfa Romeo, Cadillac, Honda, and... you get the idea.

As it stands right now, the deal could go either way. We're hearing that the sticking point seems to be the valuation of Pininfarina, which, while considered one of Italy's automotive crown jewels with an impeccable name and history, has nevertheless not made any real money in quite some time. The company has shrunk significantly (down from a 2006 high of around 2700 employees to a current count of around 800) and still has considerable debt.


So, this contrast between the Pininfarina name and reputation and the grim financial reality make getting to an accurate and reasonable valuation tricky.

My source told me that Mahindra's plan is to leave Pininfarina independent, but declined to elaborate on exactly why Mahindra was interested in the company. The Tech Mahindra angle is important, but it's not like Tech Mahindra isn't doing this sort of work already. But, by putting together a combination of rumor, reading between the lines of things I was told by my inside source, and a good bit of frankly hopeful speculation, I think I have an idea: they want to build cars.

Of course, Mahindra already builds an assload of cars, but I think what Mahindra wants to do is build a very specific kind of car, and sell it in places they normally don't sell cars. That kind of car is a luxury, high-end car, and the place they want to sell it is in the US.


That leads me to my wild guess: They want to use the Pininfarina name for these cars.

The luxury car market — especially in America— is one I think Mahindra is interested in, but so far hasn't had the right hand to enter. When Mahindra bought SsangYong, they did view it as a way to move upmarket, and while that worked, the SsangYong brand has pretty much zero meaning in the US, and was not a good fit. If Mahindra wants to come play in the premium car space, they need to do something more than make up a fancy name.


They need a lineage, pedigree, and name recognition, and Pininfarina gives them all that. Plus, it's sort of an open secret that after all these decades of designing beautiful cars for other companies and getting a little fender badge at best, Pininfarina (especially Paolo Pininfarina, the chairman) would love to finally build cars under the Pininfarina name. One anonymous source called it his "wet dream."

So, just imagine with me what this could, hypothetically, mean: a whole new car company, most likely positioned to compete with Maserati, Bentley, Jaguar, and maybe Porsche. It would be a company that would play on Pininfarina's years of designing beautiful cars, and I'm imagining a range that could include a large sedan, to compete with Bentley, maybe a coupe, and a flagship sportscar/borderline supercar.

Doing this would give Mahindra a real foothold in the US market, as well as other major premium markets in Europe and China. It's not a space Mahindra currently competes in, and the Pininfarina name and history let them come in with a ready-made audience.


I'd love to see what an independent Pininfarina, making their own cars, would be like. Their track record is pretty spectacular, design-wise, and they even have a badge and logo already known to the sorts of people who would potentially buy these cars.

Still, the deal has to actually close first, but I think that if it does, we'll see some exciting things soon.