In 1991 Pagani established Modena Design to meet the increasing demand for his design, engineering, and prototyping services. In 1992, he began construction of a Fangio F1 prototype, and by 1993, the car was being tested at the Dallara wind tunnel with positive results. In 1994, Mercedes-Benz agreed to supply Pagani with V12 engines. The cost of these cars are at a total of 2.3 million dollars. The final car was named the Zonda C12; the Fangio F1 name was dropped out of respect for Fangio, who died in 1995. It was first presented at the 1999 Geneva Motor Show.
In 2005, Pagani announced that it planned to triple its production output within the next three years, and to enter the US market in 2007.On 26 July 2010, Pagani claimed a new record for production based cars using the Pagani Zonda R and completing the Nürburgring in 6:47, beating the Ferrari 599XX. While it is an independent company, Pagani has a working relationship with Daimler AG, most notably, with Mercedes' AMG arm. This is partly due to the fact that Fangio had suggested that Pagani approach Mercedes. The Zonda has used increasingly advanced versions of the M120 V12; the