PININFARNIA

THE NEW CUSTOMER DECISION

Car of the year 2010,Geneva

Alfa Romeo (1930) 2uettottanta (2010)

AKSHIT SOBTI
ANKUR VERMA
JASDEEP BEDI
ABHINAV PARMAR
BHUPESH SINGH
 CONTENTS

Company Background
Position in 1990s
Operations at Pininfarina
Improvement Initiatives in 1990s
Deal with Mitsubishi
Questions
Future Scope
 PININFARNIA BACKGROUND

 In 1930 Battista “Binin” Farina founded.

 Specialized in design and production of custom and small series
automobile.
 Greatest success- producing revered designs such as Ferrari Berlinetta
Dino and Alfa Romeo Spider Duetto.
 In 1966 after death of Farina, name of business was changed to
Pininfarina.
 Throughout the 1960s and 1970s it continued to design and produce
unique automobiles- Ferrari Berlinetta, the Lancia Flaminia, the Austin A
40 and Morris 1100.
 THE NICHE MANUFACTURER

 Pininfarnia was considered a niche manufacturer.

 Production volume ranged from only one or two cars per day.

 For special “sedans” such as Fiat Coupe 50 or 60 cars per day.

 It had produced over 17000 Fiat Coupes in 1994.

 Volume producer bargaining power was high and niche

manufacturer margins were narrow.
 Flexibility as they were often given contracts on models that had
higher then usual volume uncertainty and larger seasonal
fluctuations in sales.
 Products aimed at narrow market segments that were difficult to
specify and had rapidly shifting tastes.
 They coped by developing elaborate contingency plans as this
allowed them to rapidly shift workers from one line to another as
demand fluctuates.
 This increases station time so that the line moved more slowly.
 ADVANTAGES OF NICHE PRODUCTION:

 Niche manufacturer costs for small volume products were lower than
those usually achieved by volume assemblers.

 Twice less capital and fixed cost.

 General purpose equipments and fewer other specialized tools needed.
 Fewer mechanically performed operations and lower level of
automation.
 Do not use continuously moving assembly line, had “stop and go
process”.
 Highly competent and renowned design skills in product and
process.

 Design services were an independent source of revenue for them.

 In 1994 design and engineering revenue totaled nearly 90 billion

pounds.

 Close links and effective joint problem solving between design

and manufacturing was a major advantage in success of a new car
model.

 Some designers such as Pininfarnia and Bertone had widely

recognized brand names.
 PININFARINA POSITION IN
THE 1990

Problems arises like:-

•Capacity utilization

•Global competition

•Japanese firms enter

MANUFACTURING OPERATIONS AT PININFARINA

 Pininfarina produced both bodies and fully

assembled cars at two major production facilities:

1. Grugliasco

2. San Giorgio
IMPROVEMENTS IN THE 1990S

∆ Rapidly phased out the production of bodies and

assembling
∆ Committed toward new models
∆ Operational improvement in quality , cost and
deliverability
∆ Manufacturing performance improve
WORKFORCE AND QUALITY INITIATIVES

Two major changes

1.Introduced work team system model

2.Training program

 specific operation and techniques training

 Interpersonal skills training
 SUPPLIER DEVELOPMENT

 In 1991, Pininfarina had about 650 supplier. Typically,

competitive bids were among supplier and volumes were
split among several supplier.
 By 1993, the number of supplier had been reduced to 350
 Advantages :- increase frequency of deliveries and
increase quality
 Disadvantages:-decreasing total amount of combined
inspection
 By 1996, the number of supplier had been
increased again to 450 driven by
 Improved purchase price and inventory levels.
 Used new production model
 Manage customer needs
 Assemble vehicles
 THE NEW CUSTOMER DECISION
Design 

 A perfect blend of beauty and technological innovation...

Engineering 

 From definition of styling to release of the product...

Manufacturing

 Pininfarina is a leader in the production of niche vehicles...

ARC 

 The Pininfarina Aero-acoustic and Aerodynamic Research Centre.

 Pininfarina Extra 

 Enter the Pininfarina world of the product and interior design.

 Special Projects 
 Looking for the car of your dreams? Pininfarina will create it for you.

 Consultancy

 In this section you can find all the information about the services offered by Pininfarina

Consulting

 Customers

  Alfa Romeo, Ferrari, Ford, Mitsubishi, Volvo and many other leading names on the world

automotive scene..
SERVICES
Car, automobiles, design, style, history, heritage,
collectors, dream car, engineering, production,
Pininfarina, vehicles, niche, creativity,
prototypes, show car.
CUSTOMERS
Ferrari, Maserati, Fiat , Lancia, Alfa Romeo,
Peugeot, Citroen, Rolls-Royce, Daewoo, Honda,
Hyundai, General Motors, Brilliance, AviChina –
Hafei, Chery, JAC, Ford, Jaguar, Volvo,
Mitsubishi
 CAPITAL INVESTMENT

 New production facilities would have to be acquired and equipped

for Mitsubishi production.

 Additional expenses related to the paint shop which would have to

run for additional shift.

 The Pajero would offer a two tone painting option, and this also

posed some problem for the paint shop.

 Space is required to dry and store vehicles in between painting

stages.
 QUALITY

 Bertrandi knew that Mitsubishi consider its own quality standards to be very

high and that it focus differ from Pininfarina’s existing customers.

 Some in the company believed the Mitsubishi might demand the defect level

to be ¼th of Pininfarina.

 Experience shows that different customers considered different things in

deciding what was the defect.

 Some customers specified the quality as harness of engine compartment,

while other manufacturer only functionality was considered.

 PARTS AND LOGISTICS
 Major mechanical parts like engines would be supplied by the

production in Japan either from Mitsubushi itself or from one of

its suppliers.

 Other parts are sourced from Europe.

 Mitsubushi agreed to own the inventory until it arrived at

Pininfarina.

 Pininfarina has some experience in long distance supply chain.

 Pininfarina calculated that 13 days shipping would be required.

WORK-FORCE
 600 additional Direct Workers
 200-240 Indirect Workers
 Full Utilization of present Resources Possible
 Ramped Down existing Contracts business
 Q&A
1.1.Should
ShouldPininfarina
PininfarinaAccept
Acceptthe
theMitsubishi
MitsubishiBusiness
Businessoror
Not
Not??
Yes
Yes! !
 Learning Opportunity
 Learning Opportunity

 Chance to improve Operation system and make compatible with

 Chance to improve Operation system and make compatible with

global competition
global competition
 Promises Utilization of extra facilities available due to retirement of
 Promises Utilization of extra facilities available due to retirement of
old models
old models
 Chance to be a GLOBAL LEADER in Niche manufacturer
Chance to be a GLOBAL LEADER in Niche manufacturer
 Easily Adaptable Japanese Model with Pininfarina’s Operation.

2. Pininfarina’s Possible Strategies for future Competition
• Should Adopt the Japanese Operation system as Japanese
manufacturers are the big threat in European Auto market at
that time
• May Identify Itself as Global Niche Manufacturer by getting
order from almost all Volume manufacturers.
• Same time should Joint Venture for designing with big players
of Auto market
 THE DEAL
The agreement between Mitsubishi Motors and Pininfarina would involve purchasing an
industrial site as a production facility dedicated to the production of the new Mitsubishi
PAJERO PININ. Initial production with basic facilities would cost around ₤4 billion.
The plant will carry out the assembly and finishing operations, as well as the final check-
up and testing on the track adjacent to the plant. The body assembly and paint shop would
remain at the Industrie Pininfarina factory in Grugliasco.
For Pininfarina, this agreement means not only a significant increase in its manufacturing
operations, but also opens the door on an extremely promising market sector. The compact
SUV segment (small size Sport Utility Vehicles) have been one of the fastest growing
segments in the European automotive market. Sales volume of compact SUVs are expected
to reach approximately 440,000 units by the year 2000.
 The Group has reached a level of excellence in the quality/cost/service ratio, also in its

manufacturing activities, like the ones of design and creativity, and represents a particularly

significant event in the current automotive scenario, both from the industrial point of view and as

regards employment.

The plant will provide the local economy a substantial boost. It will employ 450 people,

creating 200 new jobs and transferring 250 jobs from other Pininfarina plants.
Thank You