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Could sell Italdesign or a stake amid Europe overhaul

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UST Global mulls majority stake in Italdesign, talks

ongoing

MILAN, Oct 28 (Reuters) - Volkswagen could

decide on the future of its Italy-based design and engineering

unit Italdesign by the end of this year, Italdesign CEO said on

Tuesday.

The German automaker, which is under pressure to overhaul

its European operations amid increasing competition and soft

market demand, is considering plans to divest from Italdesign,

union representatives told Reuters earlier this year.

Options could include selling Italdesign - based in the

northern Italian city of Turin and fully owned by Volkswagen

through its premium Audi unit - as well as a stake in it.

"Hopefully there will be some developments by the end of

this year," Italdesign CEO Antonio Casu said during an

automotive conference in Milan, Italy.

Italian union FIM Cisl said American-Indian tech and

software group UST Global was assessing a possible investment in

Italdesign via purchase of a majority stake.

Talks are ongoing and UST met workers' representatives at

Italdesign in Turin earlier this month, although no decision has

been taken, FIM Cisl's Igor Albera said.

An Audi spokesperson said on Tuesday the company was not

engaging in speculation.

"Audi continuously reviews its strategic orientation. This

also applies to our investment portfolio," the spokesman said.

Italdesign was founded in 1968 by Giorgetto Giugiaro, one of

the world's most influential car designers, who sold it to

Volkswagen in 2010. The German group took full ownership in

2015.

Italdesign has created models for several brands including

Volkswagen Golf, Fiat Grande Punto, Alfa Romeo 159 and, more

recently, Audi Q2 compact SUV.

The company employs over 1,300 people, most of them in

Turin. It generated a record turnover last year of 332 million

euros ($388 million).

($1 = 0.8575 euros)