Industrie Pininfarina: The New Customer Decision

A renowned manufacturer and designer of niche vehicles for major automobile companies has traditionally competed on flexibility using a highly skilled design and manufacturing workforce and low levels of automation. However, the European auto market is threatened with a shakeout. The director of operations must decide whether to accept an offer from Mitsubishi to become the exclusive European manufacturer of a sport utility vehicle. The order would more than double the company's manufacturing volume and relieve pressure to replace models currently in production. However, the fit of the order with existing manufacturing strategy is poor, and major changes in facilities and equipment as well as people and systems would be required. The case is suitable for use in an operations class to introduce or apply basic concepts in operations strategy or to discuss operations capability and strategy with executives.