Silvio Pietro Angori
Pininfarina, the Italian design and engineering firm that was acquired last year by Mahindra and Mahindra and its technology unit Tech Mahindra, is looking at opportunities beyond automobiles, its mainstay so far. With global firms looking at on demand business models and crunching time to bring products, the opportunity to offer design led services is enormous, says Silvio Pietro Angori, the head of Pininfarina, in an interview with Ayan Pramanik and Raghu Krishnan. Edited excerpts:
How has the journey been ever since Pininfarina was acquired by Tech Mahindra?
We are just three months into the wedding (after integration). In reality we have known each other since many years, and I think that has been essential driving factor to get to where we are today. We have been working together for many years with Mahindra & Mahindra as a designer of an engineering house. This event comes at the end of a journey. There is a transformation in the world in this moment. Probably, it is not just the Internet of Things, it is much more than that; Internet of the World that is where the we thought the partnership happened. We contribute and design the experience of end-users and customers and clients; because it is where we make a difference as a company.
What is the opportunity you are looking at?
Tech Mahindra has more than 800 clients and we have about 160. If 10 per cent of Tech Mahindra's clients become Pininfarina's clients, we would have 80 new clients. That is a 50 per cent increase and that is the extent of the opportunity.
Many of the pillars that have been there for centuries are disappearing. Think about the brand equity that has been associated products, goods you would use. Now you would use something temporarily (due to the on demand economy) . You have to be able transform the Brand Equity that was associated to a product into the brand Equity of a service. That is where we can make major difference together with Tech Mahindra.
How are your customers adopting to the shift towards becoming a service business?
I will repeat a phrase of the CEO of Ford. A few weeks ago, he announced that the company was moving from being an automobile company to becoming a mobility company. So, they are embracing the change. Did I say that they are more advanced? But certainly the Board is going to force them to adapt to the change or the most progressive ones will drive the change.
The automobile (business) will always be there because it (gives) freedom and passion of driving. But equally, there is an emergence of services linked with the automobile business -- and that is not just limited to renting of a car. Automakers are facing these changes and are imagining how they can play a role. They can certainly do that by using the brand equity they have built over their entire existence.
A bottle of Coca-Cola has had the same shape since 1916. Give that to a four-year-old child -- he will touch it and for the rest of his days, he will blindly touch it and recognize that it is Coca-Cola. So the design becomes a product. Now there are many other examples. Think about a Ferrari. We have designed them all, so we have created the product, the brand. Now you have to do something that is design to service. That is the change that automobile companies are looking at.
Design is great. But is scaling up a bigger challenge?
That is true. The point is that the customers you are going to address are not those who were there before. There is an incredible amount of distinctiveness needed by customers and clients. But in reality the world is not that and therefore the design that makes the difference has an entire new world.
We have been in China for many years. The first pure Chinese cars have been designed by us and some of them are still in production. Now that country is moving from what it was. The world of design is not limited.
Think about Uber. If I want to use it, I want the same thing every time. So Uber wants to be different every time. Uber did not exist six years ago. So what I am saying is that there are hundreds of jobs that are fading away but there are many more coming out. So, if I would focus (only) on the cost and would not challenge myself, I would be lost. This is where the Pininfarina Board decided to get married to Tech Mahindra. That is where we will find a house to grow.
Will you set up a unit in India? How fast will you grow under the Tech Mahindra umbrella?
No, we don't have a unit per se. M&M is a strategic investor for us and we go hand-in-hand in the market. It is not important for us to have a unit, We have Tech Mahindra.
Our combined business is $550 million. We are may be among the 15 largest design and engineering houses in the world. We aim to double that business in the next three to five years. There is an incredible amount of demand for engineering and design services. Think about the changes in the automobile sector; connected cars, electric cars, electric buses. The automobile industry is going through unique changes. This is good on two fronts. First, Tech Mahindra is already in their business and second is the traditional mechanical work that we do.
As Pininfarina, we have about 15-18 per cent of the work coming from non-automobile and the rest is automobile. Out of the 100 per cent, 35 per cent is pure design and the rest is engineering.