Bertone has long been distinguished as one of the motoring world's top designers, Giles Chapman says, but the Italian coachbuilder finds itself faced with formidable challenges

Such Italian names in car design as Bertone are very much the motoring world's equivalent of Ferragamo, Chanel and Louis Vuitton. The motor show headturners - like Bertone's Aston-Martin-based Jet sports estate at Geneva recently - represent the catwalk couture, high-profile and unattainable.

Then there are the branding joint ventures. Bertone's designs for the Citroën Xantia and XM and even the Daewoo Espero and Skoda Favorit, brought the name to a global audience of "retail" consumers.

But just as Ferragamo still employs shoemakers and Vuitton makes its own luggage, Bertone has coachbuilding at its core. And not just a few huts from which handmade masterpieces emerge, but a massive 90,000 square-meter car factory in Turin, as raucously active as any other, from which 30,000 cars and 20,000 motorcycles emerged in 2000 thanks to the toil of almost 2,400 workers. Chanel's row of sewing machinists, by comparison, is inconsequential.

"So what?" you may ask. Bertone, to most people, represents the Lamborghini Miura and Countach, or the egalitarian, mid-engined fun of the Fiat X1/9 - classic Italian sports cars with truly arresting styling. It certainly does. Or rather, did. For Bertone now seems to be in deep trouble. The steady decline began on 26 February 1997, the day Giuseppe "Nuccio" Bertone died, aged 82.

He didn't found Bertone. It was his father, Giovanni, who began fabricating bodywork parts in his workshop in 1912, creating his first complete car body on a SPA car in 1921. In those days, few cars came with bodywork fitted; customers had to commission their own from myriad small bodybuilders, such as Carrozzeria Bertone. But the Bertone firm became one of the biggest in 1927 after it secured a regular order from Lancia.

Nuccio Bertone, with an accountancy diploma under his belt, joined his father in 1933, giving up a business-studies degree to do so. Bertone's car bodywork of the late 1930s was characterised by its aerodynamic lines and neatly folding convertible roofs.

While the enterprise prospered, Mr Bertone enjoyed himself as an amateur racing driver. But the old man retired in 1952, and Mr Bertone had to address a very serious problem for the coachworks.

Technical advances in the car industry meant a separate chassis was becoming redundant. Most cars now came with an integrated, welded steel body, or chassis, module called a monocoque. Bertone was struggling along and making small series of special-bodied MGs - some of the last cars with separate chassis - for the US market. But prospects looked bleak.

Mr Bertone saved the family pancetta when Alfa Romeo asked if the firm could build 500 coupe bodies for a new car, the Giulietta Sprint. Mr Bertone bravely decided to invest in a proper manufacturing plant with stamping machinery to shape the Sprint's curvy panels instead of old regazzi, fashioning them with little more than hammers and practised eyes. The order for 500 bodies eventually became 40,000. Mr Bertone later joked that had Alfa Romeo known how popular the Sprint would be, it would never have involved him.

What also swung it for Bertone was the amazing design talent of its styling chief Franco Scaglione. Mr Scaglione was a mercurial character, but he designed sensational, pulse-racing machines, like the Sprint and the BAT "dream car" series, with copious aircraft influences in their aggressive shapes.

Mr Bertone liked to describe himself as a designer "talent scout". When Mr Scaglione left in 1959, he promoted the talented Giorgetto Giugiaro. When he departed in 1965, Mr Bertone nurtured a youthful Marcello Gandini. Both men have gone on to become world-renowned car designers, a fact of which Mr Bertone was "immensely proud".

Bertone expanded steadily, opening a large factory at Grugliasco, Turin in 1961 to build "niche" models for Alfa Romeo and Fiat. The company made 140,000 Fiat 850 Spiders and 180,000 Fiat X1/9s, and in 1971 Mr Bertone received an Italian knighthood for his services to industry.

With his talented young designers, and with Mr Bertone often sitting behind the drawing board himself, the firm's studio produced a procession of beautiful cars. Some - such as the Iso Grifo (1964), Lamborghini Miura (1966) and Espada (1968), Lancia Stratos (1970) and Alfa Romeo Montreal (1970) - were made in small numbers for connoisseurs. Others - like the Carabo, Marzal, Athon and Nivola - were inspiring showpieces, pure and simple. Unlike its rival Pininfarina, Mr Bertone barely influenced British car design. The elegant 1964 Gordon Keeble was an exception, but only 99 were made, while Mr Bertone had a go at redesigning the Mini. But British Leyland shunned the neat little hatchback - which pre-dated British Leyland's own Metro by six years - although it was manufactured in Italy by Innocenti.

The 1970s and 1980s were times of fluctuating fortunes for Bertone, which at one time was forced into customising Volvos to make ends meet. However, the company bounced back by turning family cars like the Fiat Strada, Fiat Punto and Vauxhall Astra into smart convertibles. Another departure was building the C1 scooter-with-a-roof for BMW in the late 1990s.Mr Bertone oozed urbane affluence, a short and foxy-faced man with a penchant for sharp tailoring and sunglasses. In 1989 he was awarded an honorary degree in science from the Pasadena Art Centre College of Design.

Until his death, Mr Bertone had seemingly achieved the impossible: keeping a medium-sized European manufacturing business operating in the face of globalisation. Since then, Bertone has drifted, despite the efforts of Mr Bertone's two daughters, Marie Jeane and Barbara, who inherited the firm.

Bertone's recent array of show cars have proved unmemorable; the last car designed for a client to go on sale is the Citroën Berlingo, and that's not exactly in the Miura bracket for excitement. Perhaps more seriously, the BMW C1 has been dropped after slow sales, Fiat has decided not to replace the Punto convertible Bertone used to build for it and the Opel/Vauxhall Astra coupe and convertible cars - more Bertone factory fodder, but designed by General Motors - are coming to the end of their production lives. Even the company's website was apparently last updated two years ago. All of this signals an idle factory likely to drain the company of funds.

No one would countenance Chanel or Ferragamo heading for oblivion, but could that be happening to Bertone, which conceived some of the all-time greats, such as the Lamborghini Countach and Lancia Stratos? In Bertone's 92 years of existence, the legendary carrozzeria has been full of surprises. So, please, surprise us again, Bertone.

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