Selling less than the demand | FerrariChat

Selling less than the demand

Discussion in 'FF/Lusso' started by MalibuGuy, Mar 23, 2017.

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  1. MalibuGuy

    MalibuGuy F1 Veteran

    Sep 18, 2007
    5,280
    The business model of selling less than demand makes sense for a Ferrari on several levels. It supports MSRP in an industry where discounts are the norm. It maintains exclusivity. It sustains the mythical aura of ownership.

    But is this what Ferrari is actually doing? Or put another way, is Ferrari doing this well?

    Some models are in such demand that from one generation to the next, the model is oversold to the point of offending and frustrating customers.

    While other models from one generation to The next struggle to meet target sales volumes. Dealers resort to making deals with customers to buy a model he doesn't want to get the model he does want.

    It's like going to a restaurant and being told that in order to get a table you have to agree to order the tuna casserole first and then the next time you come you can order what you want--the lobster!
     
  2. Nelsonc275

    Nelsonc275 Formula 3

    Sep 27, 2013
    1,626

    This is all very true, but the market for anyone who wants to buy a Ferrari is large enough that I don't really think it matters whether people get angry and jump ship to another brand, because there will alway be another person waiting to jump in line.

    Ferrari has done a great job with this considering how many people are willing to support then entire line of cars. People will buy a Cali T, FF before, now GTC4 Lusso, 488 etc just to get in line for the LE cars, or get quicker delivery of the top tier normal production cars (812S). They expect people to start at the bottom, not saying anything negative about the Cali T or Lusso, but these are the cars with less demand in my opinion, so if you support them, you get rewarded.
     
  3. vinuneuro

    vinuneuro F1 Rookie

    May 6, 2007
    2,574
    Chicago
    Full Name:
    Vig
    It all works until your products no longer have universal appeal (turbo V8), and you are no longer the only game in town and the competition begins to hit its stride (McLaren).
     
  4. subirg

    subirg F1 Rookie

    Dec 19, 2003
    4,186
    Cheshire
    It's a constrained demand world that Ferrari live in and so, yes, much as we don't like it, enough of us are willing to play along. Same happens in lots of other markets too - witness Patek watches as another classic example.
     
  5. Monsieur Yoge

    Monsieur Yoge Karting

    May 20, 2016
    78
    This might be true for the time being but the thing is, now more than ever, the supercar market is extremely competitive.

    A lot of people are not willing to part with their hard earned money to buy a car they don't want in order to get a car they came to look at in the first place.
    There is a big reason why there aren't any dealer games for mass produced Ferrari's elsewhere in the world. The dealer games is something that is exclusive to the US because most customers there are willing to play ball with Ferrari but elsewhere, customers will gladly take their money to other manufacturers who will be more than happy to get you a car you want ASAP as at the end of the day, it's a business and the cars just happen to be the commodity.

    Credit has to be given to the Ferrari dealers in the US for controlling the market the way they do but I suspect, given enough time, the whole kiss the ring powerplay will be thrown out the window in the distant future as the younger buyers (those kids who hung Ferrari posters on their walls grow up eventually, and some of them will have done well enough for themselves) who have the money will not appreciate the arrogance of a car maker that is no longer 'the only supercar' manufacturer so to speak.

    McLaren are no longer the new kids on the block, Lamborghini stopped making cars that look good but drive like pigs and Porsche practically invented the whole 'sportscar' segment and will always be a serious alternative. Add into the fact that Audi, AMG and several mass car manufacturers are getting into the supercar/high-end sportscar game, potential clients are spoilt for choice.

    Times are changing, and as always, so will the market. The market is much more demanding and potential customers won't wait for something good when there is something newer and better to be bought right around the corner with companies who will welcome new or old customers, with open arms.
     
  6. MalibuGuy

    MalibuGuy F1 Veteran

    Sep 18, 2007
    5,280
    My way of thinking would be to simply adjust production volumes. Ferrari produces a bespoke product. So make what customers want in terms of models, not just carbon trim, and tri-colori paint.

    In today's market that means:

    Make more of the 488 spiders, 488 GTBs and 812s.
    Make more of the LE too!
    Make less of the GTC4s and Calis.

    And then to sustain the brand, keeping making improvements in terms of technology, style, product quality. and ownership experience
     
  7. 21ATS

    21ATS Formula Junior

    Dec 10, 2016
    988
    Kent, UK
    Full Name:
    Alan
    Interesting discussion. I'm a potential new customer to the brand drawn in by the FF and Lusso and I don't quite grasp some of the marketing, attitudes and irrational loyalty.

    I've visited two dealers so far in the UK and just found them rather ambivalent. It does put me off to be honest.

    Is the restricted supply/production something done by design or is it simply restricted by manufacturing capacity? In so much as are Ferrari actually engineering this situation or are they simply at manufacturing capacity and restricted by other factors (emissions regs, crash testing requirements etc?)

    Looking through the forum (mostly the FF/Lusso sub forum in my case) I find the product development via customers an interesting choice. Particularly things like the Lusso infotainment system, which on a £300K car should work as described.

    I also find some of the options an oddity at this price point. Sure I get the idea that you can customise your vehicle with bespoke paint & trim etc, that makes a lot of sense that it's chargeable - it could be effectively anything and you'd expect to pay extra. It's things like Hi Power Hi-Fi (it should be Hi Power anyway if the standard system is crap), front cameras, suspension lift, parking sensors, Apple Carplay. You're paying £300k, these are things that should just be on it anyway.

    It will be interesting to see if it evolves, or if it even needs to evolve, they're not struggling for customers working the way they currently are it seems.

    Then you read that heavy discounts were readily available on FF's from new, which doesn't really add up with the business model MO.
     
  8. Scraggy

    Scraggy Formula 3

    Apr 2, 2012
    2,064
    England
    Full Name:
    Scraggy
    Ok

    UOTE=21ATS;145286512]Interesting discussion. I'm a potential new customer to the brand drawn in by the FF and Lusso and I don't quite grasp some of the marketing, attitudes and irrational loyalty.

    I've visited two dealers so far in the UK and just found them rather ambivalent. It does put me off to be honest.

    Is the restricted supply/production something done by design or is it simply restricted by manufacturing capacity? In so much as are Ferrari actually engineering this situation or are they simply at manufacturing capacity and restricted by other factors (emissions regs, crash testing requirements etc?)

    Looking through the forum (mostly the FF/Lusso sub forum in my case) I find the product development via customers an interesting choice. Particularly things like the Lusso infotainment system, which on a £300K car should work as described.

    I also find some of the options an oddity at this price point. Sure I get the idea that you can customise your vehicle with bespoke paint & trim etc, that makes a lot of sense that it's chargeable - it could be effectively anything and you'd expect to pay extra. It's things like Hi Power Hi-Fi (it should be Hi Power anyway if the standard system is crap), front cameras, suspension lift, parking sensors, Apple Carplay. You're paying £300k, these are things that should just be on it anyway.

    If you are new to Ferrari and getting poor attention my suggestion go in with a very clear objective articulate it and execute. They get so many people going in and umming and aaaahing - truth is they cant add value its all out there on the web, find a car you like and go buy it.

    I am afraid they are well off for recurring business so unles they smell conviction and know how they will be luke warm, they are sales people.

    It will be interesting to see if it evolves, or if it even needs to evolve, they're not struggling for customers working the way they currently are it seems.

    Then you read that heavy discounts were readily available on FF's from new, which doesn't really add up with the business model MO.[/QUOTE]
     
  9. cheesey

    cheesey Formula 3

    Jun 23, 2011
    1,921
    there is the positive effect of keeping the secondary ( used ) market up by diminishing the effects of depreciation...which essentially is to the benefit of all, purchasing any Ferrari
     
  10. MalibuGuy

    MalibuGuy F1 Veteran

    Sep 18, 2007
    5,280
    I'm glad someone brought up secondary or used market.

    So what is the effect of coercing buyers into buying a new model they don't want and one which presumably the dealer is having a time to shift.

    After a year, the buyer trades out of the undesired model and gets the one he wants.

    What effect does this used model have on the secondary market? I doubt it supports the price very much. Now the used car has to stand on its own merit. And the price falls so that someone will buy
     
  11. LVP488

    LVP488 F1 Rookie

    Jan 21, 2017
    4,839
    France
    Ferrari is currently caught in a contradiction - they know the value of the brand is supported by exclusivity, and at the same time they want to sell more cars to get more money.
    What they are trying to do is to increase the sales of what they call the GT cars (California and Lusso) in order to keep the exclusivity on what they call the Sports cars (488 and 812S) - but that's difficult to sell to the customers.
    I know many here praise LdM but to me Ferrari missed the opportunity to develop the Maserati brand when they controlled it, they should have searched for volumes with Maserati and preserved the exclusivity of Ferrari.
    Some may argue that people would have wanted Ferrari rather than Maserati anyway, but in my opinion they could have avoided that by clearly differentiating the products - today a 488 (and I guess also an F12 or 812S) can perfectly be used as a daily driver, which for me does not make sense. With more focused specs they could more easily limit the dermand and retain the exclusivity, while using the Maserati brand for larger production would have fulfilled the volume goals.
    In reality Ferrari completely failed with Maserati (selling similar quantities of Ferrari and Maserati) so that eventually Fiat took back the control - it's history now, but a failure that Ferrari is still paying.
     
  12. F1BHP

    F1BHP Rookie

    Mar 10, 2017
    32
    I completely agree that the 488 has gone way too soft. I sold mine quite quickly as I found myself getting in to my R8 GT when I wanted to go have fun and enjoy the best sound track. I picked up the FF for the V12 and the exhaust note which gives me that feeling that was lost in the 488.
     
  13. furmano

    furmano Three Time F1 World Champ
    Silver Subscribed

    Jul 22, 2004
    31,905
    Colorado
    Full Name:
    Furman
    When it comes to the production models, Ferrari seems to have it all wrong. :(

    Pushing people to buy California's and FF's and turning people away when it comes to the 488 and the F12 (now 812). Not good.

    Ferrari needs to figure out the production imbalance. Perhaps they need to add a V12 line, which would be expensive and take time to build out. Or they need to be able to better throttle output. Or somehow shift the production of different models across the lines. Perhaps this is what the new chassis platform will get them, more flexibility.

    -F
     
  14. Scraggy

    Scraggy Formula 3

    Apr 2, 2012
    2,064
    England
    Full Name:
    Scraggy
    I agree re a bit soft though sticking the car in race etc does transform, standard set up very benign. However we are not normal i would speculate at least 50% of clients have no clue and just buy for the badge.
     
  15. Zaius

    Zaius Formula Junior

    May 8, 2014
    863
    Selling less than demand is more of a myth these days.

    Really like 10+ la ferrari's available for sale at any given time. Guess these 'vetted' owners just wanted the quick $.
     
  16. MalibuGuy

    MalibuGuy F1 Veteran

    Sep 18, 2007
    5,280
    I heard that one of these vetted owners (himself a Billionaire in Las Vegas) got a LaFerrari and sold it right away to his "friend" for a nice million dollar profit.

    I would never have sold one if I got the privilege to buy one at MSRP. And I would drive the thing too!
     
  17. rocketman

    rocketman Formula 3

    Oct 1, 2009
    1,487
    NY & Miami
    +1
     

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