One thing learned about Ferrari going public

These IPO interviews are normally fluff pieces with designed to give positive information about the company.. I suspect not talking about racing since it is an expense was probably by design as they are trying to boost the IPO..
In addition telling how bad they did last few years would not help much..

 

I think its just assumed that they will continue to participate in F1 and given their rare ability to break even or make a small profit from their involvement, I doubt that there will be pressure to leave.

I'm not sure the cardigan wants to destroy the very DNA of the company so soon.

 

CNBC is first about $$$ - and Ferrari make more $$$ selling t shirts & stuff than racing, or selling cars for that matter.

 

You make a good point though about that racing is a critical element to the Ferrari image and someone should have asked about it. That image stuff is what lets them charge the money.

 

The racing image has very little to do with it anymore.

Most new car buyers couldn't name any of the drivers in F1.

Now the brand has taken a life of its own, separate and distinct from the racing heritage.

 

You don't think involvement in Formula 1 is critical for Ferrari going forward?

Put another way if they were to leave tomorrow, your thesis is it would have very to little effect on the brand, since in your own words - Ferrari is "separate and distinct" from the racing heritage now?

Please don't see this as an attack, just wanted to understand how you came to this assertion.

 

Oh my, that's quite a supposition.

If you change the phrase to most "FERRARI" buyers, I think the end of the sentence would be quite different, and after all, isn't that the target market? Ferrari doesn't really care about guys buying Ford Fiestas.

Oh, and can you tell me who drives for Ferrari F1 right now?

Geez, if you are, in fact, the future of Ferrari ownership, I weep for that future.

D

 

I weep for your comprehension skills. It is clear from context I meant Ferrari buyers. But since you need that kind of specificity, MOST FERRARI buyers are not going in to buy a new Ferrari because of F1 involvement.

Most people buying new Ferraris do not care about the racing element. They don't. Same with most buyers of Porsches. You think the typical buyer is buying due to F1 interest? If so, fine, you can live in that delusion. They are buying because they want a fancy, expensive, flashy sports car.

With Porsche, you think most Cayenne, Panamera or even 911 buyers care about racing heritage and history? Or even realize that they won at Le Mans this year? Give me a break.

You can pile on me for whatever reason, but this is pure and simple self-delusion or argument for arguments sake if you think most people walking into a Ferrari showroom, for all their international sales, are actually buying due to F1.

 

Critical, no.

The brand is self-sustainable as a luxury brand. There are other brands that left their racing heritages behind long ago, still going strong. BTW, some of Ferrari's best road car eras were at times when their racing program was at its weakest and vice versa.

I am not saying I think they SHOULD do this, but I am saying that most customers would not realize anything is even different, if they stopped the F1 program.

 

Super_Dave, again..please do not see this as an attack. I hang out with about 30+ Ferrari owners of various models every other week with my local club FOG. Formula 1 is often a very prominent topic during these meets. That is why I found your statement once again a complete 180 to my own experiences. My dealership in fact has Formula 1 viewing parties.

From what I see, these parties are quite common throughout different dealerships and Ferrari clubs in the country.

You don't have to take my word for it. You can see how other regions also have similar parties

You can view the scheduled Calendar here:
Calendar

Porsche does not participate in Formula 1

I would say this statement is a half/half. Most Porsche owners I know are interested in sporting aspect if they are part of the enthusiast crowd (911/Cayman/Boxster). I agree that most Macan/Cayenne owners probably are not. Hence the cliche statement that Ferrari is dead the moment they build a sedan or SUV.

Super_Dave, please do not see this as an attack, in a public forum..when one espouses their opinions, you will no doubt often be confronted with differing viewpoints. That being said Formula 1 is not the 'only' reason, but it's definitely a big contribution to the Ferrari mystique. Furthermore, much of Ferrari revenue comes from licensing and products.


Again, I respectfully disagree with your assertions:

Thought experiment:

If Ferrari no longer is involved in racing (their ticker symbol is "RACE) Do you feel this may have a negative effect on merchandising sales (shoes, backpacks, phones cases, jackets, toys, etc?)

Finally... Just curious, since you just bought a Mclaren MP4, did Mclaren's involvement in Formula 1 play any factor in your decision?

I hope you find my queries respectable and at face value. I look forward to hearing your thoughts.

 

I read part (very little) of the prospectus and it was great to see warnings/disclaimers on how Ferrari racing performance is tied to sales volume. This guy preached about the need to win in f1 while pushing out montezemolo. I guess that wasn't top of mind yesterday

 

No brand is ever self-sustainable.

I beg to differ.

 

as a public company, Ferrari must now be focused on building shareholder value. I think that super dave is mostly correct in his thesis. I also think the analysts would rather see Ferrari re-deploy the monies budgeted for f-1 to an area that would produce more tangible returns. in the end, the analysts and shareholders will determine the fate of the f-1 participation.

 

Super_Dave,

I respectfully vehemently disagree. I think Formula 1 is a huge driver for the brand, and in every sense of the word: Critical.

I just don't see as many Lamborghini, Maserati, Alpha Romeo jackets. That's just me.... as well as Sergio, Luc..but hey what do they know that you don't?

Source: Business Insider
"For Ferrari's Future, Formula 1 Success is Absolutely Crucial"
For Ferrari's Future, Formula 1 Success Is Absolutely Crucial - Business Insider


Finally, just realize you literally disagree with the very namesake/lifeblood of this whole forum & subject.

"The racing cars are our most effective way of making the Ferrari way known, and selling what we produce. "
-Enzo Ferrari

 

You may be correct ferraripete, but the question was never *if* this could or will happen. In fact many people here fear that this is exactly what will happen.

Super_Dave's thesis is if it did, that it would *not* have a negative long term effect on the brand.

Your thoughts?

Cheers

 

willy...sorry I ended up putting comment into your quote. my apologies to you.

 

paul,

I honestly do not know the answer. it may have an effect...it may be huge or it may not. I do assure you the analysts will run many a sensitivity analyses and figure out the impacts to the shareholder. it will happen sooner than later.

I hope they stay racing but I am no longer interested in f-1. I long for the road racing days and real sports cars

 

Not a problem.

High end brands all have huge budgets for advertising/sponsoring etc. Louis Vuitton, Hermes, Rolex etc.

Scuderia Ferrari is relatively inexpensive (they score a lot of points and make good money) and a fabulous exposure for Ferrari, particularly when winning.

 

Thanks for your thoughts ferraripete, I very much respect your agnostic position. You're right, none of us can really proclaim with certainty if the long term effect would be positive or negative of course!

I just see the two (racing/competition) as indispensable and hand it hand with the ethos of Ferrari.

Let me give another example that I hope can explain my position.

Nike

Imagine if tomorrow Nike were to end all sponsorships of all athletes. As in a complete cessation of all competitors utilizing their products.

I believe this would have a very negative effect on the brand. I think Nike marketers giving millions of dollars to athletes believe so too.

 

fair point!

 

No, that is not my thesis.

Let me make this simple, since understanding subtle notions and concepts is apparently a lost art.

Do I think F1 WAS critical to building the Ferrari brand? YES
Do I think moving away from F1 could harm the LONG TERM brand image? POSSIBLY but unclear
Do I think most buyers of NEW Ferraris today are buying primarily due to the F1 program? NO
Do I think that most buyers of NEW Ferraris today would stop consideration of a Ferrari as a future purpose if Ferrari stopped F1 participation? NO
Do I personally think Ferrari should cease F1 participation? NO
Do I KNOW that other racing heritage brands have taken temporary or permanent hiatus from serious racing and have continued strong brand recognition? YES
Do I KNOW that other sports car brands have captured a wide audience base without any racing association? YES

Simple enough?

 

Why are you being such an ass?

 

My dad has two Porsches, an air-cooled 911 (993) and a Cayenne S. He didn't buy either car on the basis of racing heritage and neither did other Porsche owners I've talked to. While they're vaguely aware that Porsche has successfully gone racing, they like the engineering of the road cars and that's the real reason they buy them.

The Ferrari customers I have encountered are far more aware of the racing history of the marque and are far more likely to follow the team on the track. Ferrari a far lower volume and more exclusive manufacturer than Porsche and followers fell closer to the company itself. Ferrari and Porsche road cars might well be comparable in terms of street performance but the business models and images of each marque strike me as vastly different. Porsche's image is clinical precision German engineering and Ferrari's is screaming Italian passion. It's far more of an event to see a Ferrari and, I presume, far more special to own one.

Frankly, I'm amazed that any long-term members of this site would see little or no distinction between the two companies. Ferrari is married to Formula1, it's the longest-participating and most successful team in it and that's just magical from a heritage and image perspective.

What percentage of the annual revenue do you think the merchandise of each company represents? And which one depends far more on its racing heritage to shift those items? Ferrari even listed itself on the New York Stock Exchange under the symbol "RACE".

All the best,
Andrew.