FNA has decreed that dealers cannot advertise models in production

the stupid thing about this advertising thing is that Ferrari is giving the advantage to the independant used car dealers... with no dealerships advertising... where do you think the customers are going to go to buy?

My guess is that Ferrari is in hot water over something regarding advertising... something legal...

OR...

OR...

they know alot more about everything and there market than I do and they have people who they pay millions of dollars to make these decisions... and guess what... its not me.

 

As in Father Guido Sarduchi's famous college commencement speach, the one where he gives you your degree on the first day of class and says....

Im agonna tellya all ya need to know about ECONOMICS... Itsa supply an a demann....

Ferrari's business model is to create demand by restricting supply. By charging high prices they create an aura of "desireability", and then they keep supply low so that they can continue to keep prices high. This works in an expanding economy where there are more and more people able to afford your product. Just as importantly, the people who are buying these expensive cars aren't stupid. If there is high depreciation, people aren't going to continue to buy new Ferrari's... In that light, they are trying to maintain the perception that there aren't many of these cars available so that potential customers will continue to pay high prices for new and used Ferraris. Problem is, this is the information age, and it is getting harder to control what people know and when they know it.

In a contracting economy, toys are one of the first things to go. Ferrari isn't going to see a market collapse, but my guess is that waiting lists are going to shrink and that isn't good for keeping their aura up where they want it. A Ferrari is a commodity, an emotional one for sure, but a commodity none the less. When there is plenty of any commodity out there, the prices have to drop, itsa supply an a demannn.... As much as some folks would like to not admit it, the rules of economics still apply, no matter how much FNA would like to distort them.

My take is that Ferrari is trying to avoid the perception that there are a lot of newer cars out there that are available so that they can keep stringing along a lot of people who are on the waiting list, as well as maintain high prices for used cars. If somebody sees 50 used 430's in autoweek, he is going to think twice before getting in line to wait a year to buy one that the dealer is telling them are "hard to get". If you have to wait a year or two for a current model car, and there are very low mileage used versions out there you might get tired of waiting, and just go out and buy what you want, and that would be very bad for FNA if a lot of people started doing that.

The problem is, as supply of low mileage used cars starts to increase in the downturn, they are going to have a harder time keeping dealers in line. If you, as a dealer, can't advertise a car over a large area, are you going to be willing to sit on it until somebody walks in to buy it? Are you going to be willing to pay as much to the owner of the car, if you know you have to go to the bank and borrow $200k, and have it sit on the floor for a couple of months? The interest on the car on the floor is going to be over $1,000 per month or more depending on rates. So you may offer the owner a lowball price on his car, but that isn't going to make him very happy, or have him come back for his next one.

Things are going to get a lot more interesting in the next 6 months...

 

I feel for nobody here. Where I live you simply cannot get on a list, forget about bumping. the cars apparently go to the highest bidder, and i am talking new cars from the dealer. I even offered a 50K deposit and would wait 3-4 yrs, they were not interested.

Why, because new ferraris are now a stockbroker/dentist fashion acessory. Its actuly has some negative stigma to say you have a ferrari these days. So the fashionistas buy the latest, the 360 and 550 are not treasured possetions of an enthusiast but out of fashion automotive trinkets. Now that enthusiasts shop elsewhere and the supply or stockbrokers is drying up ferrari has an issue. The glut of newer v8s will drop prices percipetously tarnishing ferrari. these are not rolexes they go out of fashion and get used up.

Ferrari needs to reestablish cred. How about a lighweight uncompromised car highly tracable for real drivers. These days if you drive a Nissan gtr you will be taken more seriously than if you "own" a ferrari. Seriously the brand is becomming a joke, and even though the product is still superlative there are a lot of other superlative cars out there.

On the other hand at 50k for used 360's a lot of true enthusiasts might go back to the product. if you want to see true sportscar enthusiasts look at lotus, no one there talks value only driving. For shame Ferrari, for shame

 

Maybe I am too thick but I do not understand your point.
"There is a glut of cars because of supply of stockbrokers is drying up and Ferrari has an issue" but at the same time you can't even get on a wait list because of demand from stockbrokers and dentists?

 

I disagree completely that enthusiasts do not buy and are moving away, think Ferrari as a joke...dentist are just as big enthusiast as anyone..in fact we have a dentist in the showroom right now!

The vast majorty of our customers are enthusiast, and know and love just about everything Ferrari, regardless of being just a "rich guy" stock broker

Thats excatly what will happen, the dealer will just sit on the car...the diffrence between a exotic deal and a used car dealership is...that fact..the dealer does not have to sell the car, and can afford to just put the car way..move the intrest to other cars..and wait it out...happens all the time! Now not to say they do not want to sell it..but they would rather sit it out then show a loss on that car...

I am waaaaaaaayyyyyyy toooo small to sit on a car..but I can nto take a loss either..lol

 

FofSF is a factory owned dealership. All others [except I now believe for the new one in China?] are franchises.

 

According to a gentleman that worked at Ferrari of San Francisco, Luca has a direct stake in the dealership, or at least he did two years ago. Things do change.

 

Not what I heard, and have seen.

Art

 

Tax purposes? If someone's trying to dodge tax on a $250,000 'toy'....perhaps common-sense should weigh-in and the Lease Customer needs to consider the idea that they really can't afford the car.....no wonder people are dumping cars on the 'used' market before actually paying for 15/30K services that are due....SOMEbody has to pay for that service.

Profit doesn't factor-in when Dealerships are trying to clear-out their used inventory - I once spoke to Allie Ashe, owner of FoW and he says his dealership can stay afloat on the Service Department receipts alone - add used car SALES (not leases, when the car MUST come back and sit on his lot), Challenge Car Racing program, Mercado, etc. and there's the profits.....Leasing only guarantees that the dealership will have to work-hard twice: service a lease, then have to sell a used car that a gold-chain flipper trashed-out, skimped on service, and then dumped when the lease ran out. Lease-people aren't really motivated to take-care of a car when they have no real ownership stake in the vehicle. Guess who has to pay service charges to make those 'Lease-Cars' sellable on the used market...you guessed it, the Dealerships take that out-of-hide.

I would wager that a Dealership would rather SELL, outright, a car and have it NOT come back to the used showroom - but stay in someone's garage where the dealership will get the chance to make money on the service work.

 

Used cars will out profit the service work....dealer make most there money form used cars..in fact 3 out 5 cars sold are pre-owned...

 

I know that Art Z has a majority stake now, but from what I understood Luca was allowed to keep his share.

 

Why wouldn't they have a lease program? What is the difference between leasing and ending the contract after 2-3 years or buying and selling after 2-3 years?


Since many Ferrari owners are business owners, leasing is beneficial to business owners.



It also guarantees that the dealers will get the cars back to sell.



If Ferrari doesn't lease them, third party companies will lease them out. You don't HAVE to finance through Ferrari.

 

Maybe, in any event perhaps clarity escapes me today.

The glut is happening in used cars so far, this will affect new cars and lists. The stockbroker flippers buy new in special deals with the dealers and then sell back to the dealer after a 6,months or a year for purchase price+, the dealer then sells the used car for a premium.

With this going on it is neigh impossible to get on a list especialy if you plan on keeping the car.
Now however there are less suckers who just gotta have even a used 430 for list plus so we see the problem with curtailment in advertising privelages, I mean brand mangement. The 360 which is yesterdays news is plumeting even faster.

Ferrari became iconic because its products were truly unique beautiful and exceptional performers. They were appreciated by those who understood, really drove and their appreciation gave the car(brand) its aura. I know racing was involved and in the day it was not just a grand prix circus.

Now the cars are still superlative although the styling is bordering cartoonish. However now we do not have an iconic product so much as a brand managed image still supported by a great product. Given the nature and desires( a flash car to say i am the man with little real driving) of many owners the image may not survive, ferrari now being the ultimat arriviste apendage. As the cars became more practical they were owned by many people who found them a great usable fashion acessory, the low point being Paris Hilton. this created a market, hype and buzz, managed by ferrari with new buyers on lists and
a machine to supports used prices, it was and maybe still is a bubble built on hype and image, essentialy unstable.

Yes the cars are still good, but there are any number of good cars out there, ferrari now has a wierd I am on a pedestal I have made it I am rich look at me snob appeal, kinda like feeling cool because the bouncer let you into a club in vegas.

This is a far cry from how the product was built up over time, partialy by owners who really drove and established the ferrari catchet. Now we are witnessing the beginning of the fashion abandonment of ferrari. The dealers who played games with flippers stockbrokers or whatever you want to call them, will neeed real customers. To maintain value ferrari will need owners who keep and cherish their products. Newer ferraris ie post 355 are a manufactured bubble that will deflate, and when the new resale game is over then the 6mos customer who drives free will dissapear. A lot of enthusiasts will own a 360 or 430 for relatively small change and ferrari will move to rebuild its reputation. Or maybe the flash cash in china and Russia will save them. Frankly ferrari is a porche in the 80's

I have not attempted to get on a list lately, maybe you can, but now i have a lotus 211 for the track and have thankfully kept my boxer, a car once ignored which is now suddenly"appreciated" by hoarders, sorry I mean collectors.

Basicaly ferraris are agreat product which have been overblown into another BS market.

 

I think you are talking about Ferrari of Redwood City, not Ferrari of San Francisco, which is owned by the factory. The ownership is different. Ferrari of Redwood City is a privately held company, while SF is owned by Ferrari North America (actual corporate name is different).

Art

 

That is so funny I just had to comment on it. The word is "nigh", but "neigh" is really appropriate since we're talking about the cars bearing the prancing (and neighing) horse.

 

Nope...Scottish accent.






-J

 

I don't want to be rude... but i do have to interject... you clearly have no idea about the car business. Its obvious you have never worked in the car business either (which you and most of you in here are probably proud of, which in all honesty... you can be )

Yes, ther are tax advantages to leasing. Its a fact, and to the savy common sense. And in regards to dumping the cars before the 15k/30k services... you cant dump a lease... you are obligate to your term. If you want to get out you have to shell out quite a bit of money to get out of it... to the point to where it would just make sense to hang on to the car. Also, 15k/30k services are no big deals on the more modern ferraris (360,430, etc...) its not like they are 355s so i don't really see your point here.


In regards to FoW staying alive on services... thats because they are charging maser customer 6k-8k to do clutches in cars that cost them 2k at the most and 6 hrs labor but billing customers book time. Its because they are servicing belt jobs every three years and there techs have done so many they could do them in there sleep. Its probably because FoW is paid for... and doesn't have rent (this is pure speculation) Most profit comes from the used car department. Its like that in every car dealership in America. From Kia to ferrari.... the money is always made in Used cars vs. new cars.

In regards to a dealership having to work twice has hard because they take a car back in on lease... You have got it WAY wrong. You see, if ferrari carries the lease... they only accept the deal at msrp... the customer pays depreciation (whats left between the residual value and the MSRP plus interest, tax and rent charge) on a car that doesn't depreciate. When the customer has to return the car to the dealer in ther market (9times out of 10 the original point of sale for the ferrari) the dealership gets to purchase the car from Ferrari financial (who owns the car) for its residual value... now remember... ferrari said the car was going to depreciate so therefore the dealership gets to buy the ferrari back for a depreciated price when the market has appreciated (talk about a huge spread for profit!) In regards to these "lessors" wearing "gold chains etc" you have got it all wrong... and its sad... not everyone who leases a car is a D O U C H E bag. Sometimes, they are people who are very very savvy...But lets say one of these gold chain wearing "D O U C H E bags" beats the crap out of the car and skrews it up or trashes it... guess what... they HAVE TO PAY FOR IT. The Lessor has to pay for any damages beyond normal wear and tear... and actually they have to pay for some wear and tear... Customers cannot return cars with dents, or scratches larger than about 1-2 inches otherwise they get hit with a huge pennalty which is more than what it costs to repair. The customer has to return the car on good tires. The customer has to complete all services and if they turn in a car with no services they must pay for the car to be brought up to date... also, say the car has been trashed so hard the dealership doesn't even want to retail a car with paintwork etc... guess what they do... bill the customer for damges etc... then send that car to the auction. It is MUCH better to get a car back on lease than pick up a ferrari at auction... Auction cars are the cars dealers are often affraid to sell. You see... when the dealership gets the lease back... they have a choice... keep the car and retail it... or send it to auction and wholesale it. There is much you don't know about leasing but hopefully you will find this post helpful. I can only assume that you have never leased a car before, nor are you very educated when it comes to leasing. Dealerships don't take it in the hide if the customers don't take care of the car. The customer HAS TO PAY FOR ALL OF THIS CRAP. Often times lease customers take just as good of care or better because they have to have the car inspected by the ferrari dealer... all service work must be performed at the dealer... which MANY new Ferraris are not serviced at the dealer. leased cars will likely have more documented history from factory tranined technicians than "owned" vehicles... because owned vehicles are free to do whatever the hell they want and service with whoever and do whatever... where as the leased vehicle under contract has to be taken care of and has to undergo a dealer inspection similar but not quiet as extensive as a PPI. Of course there are exceptions to this and somepeople just beat the crap out of cars... wheather they are paid in cash or leased or financed.


hopefully you will find this information useful,

With all due respect,

Justin

 

Justin all 100% true...

 

That pretty much describes Lambo, actually.

And, to your point, there aren't big waiting lists for Lambos either.

 

I agree on many of your points. Ferrari has just absolutely overproduced there cars to sustain such an above/MSRP market value. However, this might be part of Ferraris plan to attack the flippers and for Ferrari to be as profitable as possible. When Ferrari sells the cars to the dealers, they sell at pretty much a fixed price. Then the dealers sell it to there customers, and then a mark up gets put on it shortly after. Perhaps Ferrari realized that there were lots of customers who wanted there car, so they could build 5x as many 430s as they did 355s they would make more money. (more units sold) Eventually this would lead to a large amount of cars on the market (used cars) thus, deflating the markups. Then this would allow ferrari to maximize profit by selling more cars, and then they would deflate the mark up market.

In my opinon, people will still buy ferraris even if they depreciate a little bit. people expect cars to depreciate. Ferraris are pretty much the only cars in the world that have such long lasting appreciation. Many people choose ferrari because of this long lasting appreciation, but ultimately, if it stopped all together... people would still buy Ferraris, because lets face it... they are the best product in the world (no bias here LOL) Perhaps this overproduction is really a market test and market strategy.

BMW and Porsche have both tried there best to keep dealers from marking up prices. When they released the M5 and M6 they purpusely released more cars in the very first month than they did on the previous M5 to keep dealers from marking up. They had a large production increase at the beginning of the product life cycle because they wanted to make sure that the factory got as much profit, and to ensure that the dealers didn't tarnish the brand by "gouging." Its funny, you never here about "gouging" on a ferrari... its all quite normal... LOL

These are just my thoughts and opinons... it may not make sense to some... and it may not be applicable

 

Ferrari of SF has used examples of current production models listed for sale, but the price is not listed (contact us), as it it with all of the other models offered for sale. They are factory owned, so I suspect that they are up on whatever rule changes have come down from Maranello.

 

Quite correct: IF you go to owners dot ferrari dot c, o, m

Ferrari will give you links to current models based on their own searches: thus, seems nothing has changed.

Example: Pre-owned 360's http://www.ferrariowners.com/cms/public/cmd/ViewSinglePage?code=POPUP_USATO

Prices for Franchises or Factory dealers are still shown in USD or Euros depending on your search criteria: Memo...pfffht, if they cared they would have changed the official site.

 

The slide of the the Dollar may also have something to do with this. They just want to make it harder for the Euros to get their hands on used Ferraris.

 

It should be mandatory for ALL posters on this thread to bone up on the difference...

BETWEEN 'there' and 'their'...and, for that matter, "they're".

Just cuz it -sounds- da same, doesn't mean these are are interchangeable, or
that 'there' can be used for all three varieties...

 

Ohh they're you are!

I was wondering when someone was going to jump in to correct all of these peoples mistakes. I am so glad that you are hear too point out there mistakes. This community is so lucky to have somebody to help people with there grammar on they're board.

Looking forward to you're next wonderful contribution to this their, fine postin board




LOL