Lamborghini stops Formula I engine production

Lamborghini stops Formula I engine production

MODENA, Italy (Agencies): Lamborghini, an Italian great sports car manufacturer acquired recently by Indonesian President Soeharto's youngest son Hutomo Mandala Putra and businessman Setiawan Djody, has closed Lamborghini Engineering, its Formula One engine subsidiary.

"A careful assessment of Lamborghini Engineering's current situation and a lengthy analysis of the future of the Formula 1 market have convinced Automobili Lamborghini to close the subsidiary," Lamborghini's report said here over the weekend.

"This will enable the company to concentrate its efforts on expanding sales in its car division," it added.

The parent group, Automobili Lamborghini SpA, was acquired by MegaTech Ltd., a Bermuda-based company owned by Hutomo and Djody, from Chrysler Corp. of the United States in November last year, in a move that the Indonesian tycoons claimed would make the already sleek sportscar more competitive on the luxury car market and to polish Lamborghini's image. The acquisition reportedly cost around US$100 million.

Reuter reported Saturday that Lamborghini, which has interests ranging from finance and fashion to wine and golf courses, is due to begin negotiations this week with trade unions representing the subsidiary's 59 employees.

Asked if there were any prospective buyers of Lamborghini Engineering, a spokesman said: "Not that I know of, but we would undoubtedly be interested in any offers."

Automobili Lamborghini, which had an estimated 1993 turnover of 270 billion lira ($160 million), also manufactures farm machinery and racing engines for offshore speed-boats.

Ferrucio Lamborghini, who died last year, set up the Modena- based company in 1963 to compete with Ferrari, the luxury sports car maker which he said snubbed him when he complained about his own Ferrari.