UPDATE 1-Pininfarina ends car production operations

* To lay-off 127 workers in production ops

* Designer of Ferrari sports cars

* Shares close up 0.12 pct, sector up 0.9 pct (Adds background, shares)

MILAN, Oct 11 (Reuters) - Italy's Pininfarina SpA is closing down its auto production activities and will concentrate on its design and engineering operaitons, it said on Tuesday.

Pininfarina, which has designed almost every Ferrari sportscar since the early 1950s, said in a statament it had started lay-off procedures for the 127 workers in the production sector.

It said the lay-offs would cost 2.9 million euros.

"Unfortunately we are having to stop our production activities, given the way the car market is. So we are focusing on design and engineering," a Pininfarina spokesman said.

The company had announced in March it was selling its stake in a car production joint venture with Sweden's Volvo Car Corporation.

French billionaire Vincent Bollore has said he is interested in acquiring a stake in Pininfarina, which is being sold by the family owner as part of a debt restructuring agreed with banks in December 2008.

Pininfarina shares closed up 0.12 percent, underperforming a 0.9 percent rise in the STOXX Europe auto index . (Reporting By Silvia Aloisi)