"Will Ferrari's Growth Dilute Its Brand?" Report on Business Article

3 page article from The Globe & Mail's Report on Business today:

http://www.reportonbusiness.com/servlet/story/RTGAM.20071008.wrferrari08/BNStory/Business/home

 

Interesting. I was laughed out of a thread not to long ago by stating that Ferrari will build close to 8,000 a year very shortly..humm.

Ferrari is a manipulative company through and through. They try to say their product is exclusive and every one is specially crafted, when this is no longer the case, an hasn't been for the last 16 years. The reality is, they a are fudging production numbers for all model lines, and building more and more generic cars as each year passes.

In my eyes, Ferrari is no longer a true exotic car except for the Enzo, or its follow-up. Lamborghini is no longer an exotic car either even more so with that stupid Reventon thing they came out with.

Zonda, Bugatti, koenigsegg <-(SP?), Mclearen, etc seem to be the only ones left we can call truly exotic.

 

Someone very well connected told me this past week that dealers in California have lost 30% of all deposits on new machines. Whether that's true or not remains to be seen.

 

I tend to agree with Tom on this....they have watered down the cars since the 360....especially since the 360 with thoose production numbers. If you look at the judgement on F1 the other day with what happened, if the old man "Enzo" was around, he would have pulled the cars back to Modena....there is no way he would have continued racing this year. Unfortunately, ferrari of today is not like ferrari of yesterday.....but with the 20% price increase on the new cars in 2008 maybe this will cut some numbers down.

It still amazes me that the new 430 Scud coming out is faster in the 0-100 than an Enzo and does the same lap time around the track in italy at 1.25 as the Enzo. Time will tell for sure.

 

I agree with that, in the last 10 years they have been growing and selling too much, too fast.

I had the same argument with another Ferrari owner recently, whereas the company is developing and selling new models faster than the others can maintain value, upsetting many owners. A good example is the 360 Challenge Stradale, a car which many owners paid big $$ and waited to be released in 2004, then only to have the 430 come out a year later, followed by the new Scuderia 430. Now Ferrari is already touting about the new model to be released in 2009. The 360 CS market has been strong, but I think as soon as the 430 Scud debuted, the focus has been shifted far away from the 360 CS which is a very special car in its own right. IMO its a bad thing when people are eagerly expecting the "next best thing" instead of savouring the moment.

It used to be Ferrari creating only one "Supercar" per decade, ie F40 in the 80's, F50 in the 90's, Enzo in the 00's, but there have been so many niche F cars in the past 10 years that makes 'dilution' a good possiblility.

 

Ferrari is building a new production facility as we speak and there is talk of a fourth model (Dino?) to compete with the 100-120k range in the sports car market (Aston and Porsche being the main target) If this is the case, then Ferrari's days as an exclusive brand will be over. (its basically over anyway). Ferrari no longer has any real mystery surrounding it. Were as in the past, you had the "old man" to deal with and his sometimes unruly methods of dealing with things. Now its run by CEO's and various other people and the entire outlook of the company has changed. It is now a road car builder that goes racing, were as before it was a racing company that builds road cars.

Mclaren is becoming what Ferrari used to be. There mainstay is race engineering, but now they are building another hypercar along the lines of the F1 but more usable and extremely hightech, very cool.

Ferrari is now the Ford of the exotic car world. Nothing special anymore. Head on up to Woodbridge and you'll see a Ferrari on every street corner and a Lambo on every other street corner. Yorkville?? I counted 5 F430's in less then 20 minutes while passing through..rare indeed.

 

Actually Tom, word has it that the price increase will be pushing the 430 price up....its not confirmed yet that this will be a 100K car....they say its an in between (whatever that means).

But i am finding them less rare myself...every weekend now all i see is a 360 or a 430...i recall as a kid if i saw 1 ferrari all summer its was a treat. God forbid a slow down in the economy comes. We'll start seeing them for sale at Toyota dealerships.

The increase in cars has come because of new markets like Russia, China, and the likes, they should have kept the output the same and increase the price on retail and taken a few cars away from the North American market that would have helped the 360, 355, and 348 used car market alot (i think)....but hey, your right its all about CEOs nowadays....profit only.

 

I was going to say exactly the same thing!

Its so true, the history and success of Ferrari lied upon the shoulders of one man, and one vision.

Something tells me that all these foreign investors from Japan and Abu Dhabi can only harm the company as they have no clue what true passion and meaning is behind the Ferrari name. Their passion lies in the money, not the marque. I've heard of the Factory importing cheap parts from China, and contracting out others to low-cost Eastern European countries to help save money.....disgusting to say the least.

Sadly, the Cavallino is just not "Rampante" any more.

 

I guess I'm lucky....I bought my Mondial for the pure joy of driving it, and for about HALF the amount my friend Enzo (yes, he's Italo-Canadian and bought a Porsche!) lost in two years of 911 ownership in depreciation alone!

No worries about losing money...just lots of fun!

And the Mondial attracts more admiration than any 911, as I have seen time and again during the two years I had the Mondi in Germany.

I also think that older cars are more fun to drive...the smell of burning oil is sooooo intoxicating....

Bottom line: I couldn't care less if Ferrari loses its "exclusivity"....that's NOT what I bought it for....

 

Unfortunately, if someone is looking for a truly limited and exotic brand, then they will have to settle for a manufacturer who just assembles a bunch of parts and throws an OEM engine into the chassis, (Zonda, Koeniggsegg, etc...)

Don't get me wrong, those companies have built excellent machines, however there is no history or prestige when it comes owning one compared to a Ferrari.

 

Not yet anyway. Just like Ferrari didnt when they started.

 

Spyker, Pagani and Keonigsegg have been around for years, I don't think they will ever do what Ferrari or Lotus did.


The days of hand fabricating, and hand building engines are gone....along with the days of owners driving their own cars to and from the track for a racing weekend.

They don't make them like they used to!

 

"3 Ferrari dealers say Woodbridge, Ont., just north of Toronto, may have the highest per capita concentration of Ferraris in North America, perhaps the world, thanks to a healthy supply of wealthy people of Italian descent and open roads."


i found that quite funny lol...........back on topic, production will rise no doubt, so long as most of these new cars end up far east, where Ferrari is establishing itself alongside Maserati of course.

 

Fiat needs to make money, and why not leverage Ferrari to make $B's instead of $m's. Their cars are becoming more reliable and "easier" to drive. The Stradale versions can still appeal to the old-school fans.

In many ways, we're in a golden age of Sports Cars - so many reliable and v fast cars to choose from: Z06, AMG's, Ferrari's, Lotii, Maseratti, Porsche GT2/GT3, S7's, Aston's, Zonda's, Lambo's, and lots more.

It takes R&D $'s to put together the technology in the 430 and 599 - and despite having more committee's involved in putting together their cars, Ferrari is still keeping their vision for the best sports cars and GT's.

Although I'm not a target customer for a 430/460, they're amazing cars, even with the $100k donation to the F1 team with every car sold.

I believe the glut of 360's on the market has less to do with 348 spider depreciation than the USD currency sliding to irrelevancy the past few years.

 

Where did you hear this?


I think its true, except for the 'open roads' part.

When my family used to live in Woodbridge, we lived on a court with 10 houses, and 5 of them had Ferrari's in the garage! And it wasn't even a typical 'wealthy' subdivision.

 

If they cut production in half to 2,500 cars and double the price they still would have a waiting list for these cars.

They are making a mistake. SOmeone needs to go back to school over there and take a marketing course again.

Trash the 430 and only make the scud for 499,000 they stiull would sell and the 599 at 599,000 they still would sell....and the used car market would be all theirs....private exotic dealers wouldnt (couldnt) afford to keep a bunch of cars lying around. They got it backwards.

 

It was in the article.........when i was in woodbridge this summer, i saw quite a few nice cars, alot of young guys driving Porsches, Corvettes and Vipers

 

Where is the article? I'd like to read it.

 

http://www.reportonbusiness.com/serv.../Business/home

 

That link doesn't work.

This is it here:

http://www.theglobeandmail.com/servlet/story/RTGAM.20071008.wrferrari08/BNStory/Business/?pageRequested=3


That's a very interesting article!

 

disagree - the used market would be a pretty good indicator of the true value of the new stuff, a $100k premium in the first year for 430's was about what the market would bear. Otherwise the Carerra GT, Gallardo, and Murci's start looking a heck of a lot more appealing. Although do agree Ferrari consistently underprices their supercars - to keep their friends happy maybe?

Interesting point though - 1/2 the volume would meaning closing down half their dealerships because they'd only allocate 10 cars a year each? I suspect there's more revenue from the dealerships than just new car sales.

The real question, imo though; Is Ferrari making the best sports car possible. We've bounced this around before, and except for growing too large (long/wide/heavy) I'd argue they're doing ok. the Scadale and Scuderia for us fanatics, the Enzo/FXX/MC12 for the friends of the factory, and everything else for the masses. None of the other high-end/high-volume manufacturers care if their products depreciate 80% in the first few months, why should Ferrari?

There's always dealers willing to sell high-end used cars, we have a handful out west here - you must have a few out east too. $500k used cars wouldn't phase them - although may be a few more consignments.

This is mostly an academic argument for me - I'd see myself going "older" if I was to add to the stable. Ferrari can and will do what they want, and I don't particularly care. The days of Enzo are long LONG gone. Good & Bad. No modern F40's or TR's in our future, that's for sure.

 

If they cut production in half they raise the price to double they would get the buyers....the 430 and 599 were getting 100K premuims becuase people wanted the cars NOW...take away half that production run and that owuld create even more urgency.

As for the the SLR/CGT you mention this market would not be affected....the ferrari buyer would still purchase. Its just a number to these guys in this price range...especially when they show up at the country club, or the cigar lounge. A 500K fcar would bring in bragging rights...

As for the dealers, the Maserati purchase was to take care of the growth market for them fo the dealers to keep up spaces and turn over...that was the plan they should have stuck with....the Mas sport to go with the P crowd, and the 4 door to attack the BMW/Audi/Benz/Bentley crowd.

As for the used car market...the trs/348s would have easily been over the 100K mark now...these high end dealers instead of 15 cars like this for sale would have had 4 at best, they wouldnt be able to turn over that car as often because alot of folks would think that a new Z06 would be a better purchase............this would almost eliminate the poseur market and the cowboys that cant afford these cars, but think its their right to drive one.

Its a win , win situation for everyone

Heres a thought before you answer...........do you think if they made 399 enzos and charged 1.5M instead of 699K/799K when "new" you think they would have sold out the run of Enzo's?

You are correct in saying its all academic......they will do whatever they want in the end.....i just dont agree with it.

 

Good thread guys- very thought provoking. Something tells me a similar debate was raging around 1985 when Ferrari (Fiat) started cranking out the first of 7000 TRs and variants....

I'm cool with it all, as long as the cars continue to be the best performers (as is the case with the 430 and 599) and they never make an SUV or some crap like that. News of a Ferrari "Cayenne" would make me puke and sell my TR right away. Of course, it would be nice if the F1 team continues to stay at or near the top each year. Truth of the matter is, I will probably buy a new Ferrari in the next few years, or an F40 if the dollar continues the way it is and some decent ones come up for sale.

On the other hand, if Ferrari sells out too much and the mystique does indeed wane, I'd certainly start shopping around for a new fix. Maybe the McLaren if it will be available here (dealers?). All I know is Ferrari has a huge challenge if they want to continue to make the best sports cars, regardless of brand or mystique. A new R8 with the RS6's twin-turbo V10 could be quite pesky indeed.

Lastly, I don't think many of China and India's new millionaires and billionaires give a rat's backside about mystique and the Ferrari pedigree and I'm sure they would order 10 at a time (one in each colour) if they were allowed. Who knows, maybe they are? Sooner or later, one (or a few) of them will probably just buy Fiat outright anyway.

 

Can you say Viper, ZR1, NSX, FORD GT40 ? the audi is just the flavour of the season....just like the SLR was not too long ago, and and others. The only cars that seem to really hold is the Lambo/Ferrari market....if they are not careful they will lose what they spent all this time building. If they do come out with another model (Cheapy version)....i will also sell my cars.....im just better off beating up a Corvette on lease every 3 years and send it back and get a new one.

 

Agreed, but Ferrari always seems to come back and up the ante. The NSX did have a major effect on product development at Ferrari. I'm saying the R8 TT could be faster, handle better, look better, and have better fit and finish, quality of workmanship, etc. than the 430. I'm not saying Audi can compete Ferrari on brand. I'm saying if Ferrari is going to sell out the brand, they better keep making the best cars. Judging from what I'm reading these days about their "bigger is not better", lightweight/exotic materials direction, it seems they at least have a strategy to accomplish this. So, I'm not counting them out yet.