Audi has sold a majority stake in famed automotive design firm Italdesign to UST, a Singapore-backed IT consulting firm with headquarters in California and India.
Terms of the deal, including the price, have not been revealed, but Audi will retain a minority shareholding in Italdesign. It will also be “strategic partner” for the long term and an “important” client of the Italian design firm.
The deal is still subject to regulatory approval, but UST says it will help “Italdesign to expand [its] international presence across UST’s global footprint in over 30 countries”.
Krishna Sudheendra, UST’s CEO, says, the company will “support Italdesign’s vision, honor its heritage, honor its heritage and bring new capabilities that help the team continue to grow”, although he didn’t provide any details about how it will do this.
While UST employs 33,000 worldwide, including offices in Australia, it lacks the scale and profile of other IT consulting firms. Some of the best known names, such as Accenture, Capgemini, Deloitte and Infosys, employ at least 10 times as many staff.
Started in 1999 UST has grown steadily through acquisitions. In 2018 Temasek, Singapore’s sovereign wealth fund, purchased a 20 per cent stake in UST for US$250 million. Temasek has since invested a further US$120 million in the firm.
Although this seems to be UST’s first acquisition in the automotive realm, the company claims to have “worked side by side with the world’s best companies and leading OEMs in the automotive industry” since its founding.
Volkswagen purchased 90 per cent of Italdesign in 2010, with the remaining 10 per cent kept by Giorgetto Giugiaro and his family. In order to keep its Italian holdings together, Italdesign was placed with Lamborghini under Audi’s ownership.
The Giugiaro and his son sold their remaining stake to Volkswagen in 2015, and left the firm to setup their own design consultancy.
There has been speculation about Italdesign’s future in the Volkswagen Group, but nothing concrete happened until May this year when employees were told the company was up for sale, and due diligence and valuation processes were underway.
Audi’s move to offload Italdesign is part of a wider push within the Volkswagen Group to cut costs and free up cash due to softening sales across Europe and increasing competition from Chinese automakers.
Italdesign was founded in 1968 by designer Giorgetto Giugiaro and engineer Aldo Mantovani. The company’s extensive credit roll includes a clutch of iconic supercars, including the DMC DeLoren, Lotus Esprit, and the BMW M1 supercar.
One could argue Italdesign’s work at the more affordable end of the spectrum has been even more influential, with the original Volkswagen Golf, and Fiat Panda, Punto and Uno are all penned by the company.
Other credits include the first-generation Daewoo Matiz, Hyundai Excel, Lancia Delta, Audi 80, and Lexus GS.
Under Volkswagen ownership Italdesign continued to work with other automakers, although the volume of commissioned products has slowed significantly. Cars developed since 2010 include the Audi Q2, the limited edition Nissan GT-R50, and the Voyah Free for Chinese automaker Dongfeng.