As someone said, the reason it's down is because they saw a large decline in what is probably their most important growth market -- China. I'm not sure why anyone would buy this stock to be honest. It has/had a growth PE as far as mature car manufacturers are concerned, yet everything about Ferrari as a company is anti unit growth. The CEO just said they'll never build what would arguably be one of the most profitable models -- and SUV.
Well more 488 should be hitting dealers, which will help balance the market and pricing sooner rather than later. It's work economy and competition...well beyond just Mac. Also, with so many options out there, people are getting tired of playing the Ferrari 'dealer game'.
As I mentioned on V12 posting, issue is Ferrari needs to prove that they are a growth story. They only have a couple of options. Produce more cars, expand margins or sell more licensed goods. First 2 difficult in this environment. Third would hurt the brand. In my opinion their best option is to produce another line. Questions is what? Dino, SUV, 4 door?
Somebody new will be in charge in the future and they will make SUV's and every other type you can imagine Why ? Because Billions in market cap depend on it and Wall St will push for it - IMO
If think they should simply take carbon fibre monocoques, body panels more seriously and build a V12 convertible... or at the least offer a V12 convertible in aluminium. However, lower weight would help maintain or reduce need to enlarge engine capacity, control emissions more easily and offer more freedom in design. Everyone else is already using CF or some hydrid CF/aluminium form. Ferrari is way behind on this. They know how to do it but is seemingly married to aluminium materials/production. It's a huge sore spot IMO. SUVs are not the answer as they inherently have lower margins and project a negative brand image. Making a SUV is a down-market move for a sports car maker. Ferrari needs to sell cars that are an occasion to use. You drive them simply because you want to drive them, not because you need to use them to haul stuff or people. I mean, would you enjoy driving a SUV more than a sports car? Utilitarian cars damage that concept. They do not want or need extra production volume from an SUV. They need to sell more higher margin V12s. One big obstacle in pursuing more CF content would be having to write-off some of their aluminium capacity and invest in CF capacity. However, they should know that it was always inevitable.
I agree a V12 convertible CF or aluminum is a great idea. I would point to Porsche on the SUV question. Purist were upset but in end it only enhanced the brand as did the Panamara. They help drive profits and amortize R&D over a greater number of vehicles to allow Porsche to expand their sports car lines. I am not sure the 918 could have been built without them.
It works for Porsche because Porsches are a lot cheaper and are also not exotics. Ferrari needs to put great emphasis on protecting the exotic, exclusive nature of its brand image, partly to justify their much higher prices. Fcar owners do not want to keep running into other Fcars at every intersection, driven by questionable enthusiasts. Porsche sells 10x more cars than Ferrari. They are excellent cars but aside from the GT3/RS/918, are not exotic in nature or really an occasion to drive. Have you noticed how many different "shades" of the 911 you can get them in - notice how many M cars BMW are flogging? They are not exclusive or exotic. Most Porsches are utilitarian, with prestige, history and performance thrown in for a successful sales formula. Ferrari is on another level altogether and they should not make their brand appear utilitarian at all. Utilitarian is not exotic and is why exotics are never designed to be utilitarian, in a sense flawed, ON PURPOSE. You can also have too many models under a "halo" label - and then it won't be exclusive anymore. I know it won't help Ferrari's bottom line but Maseratis and ALFAs will compete with Cayennes and Macans.
The problem with Ferrari as a public company is it has to have a growth story. How do you do that? You can't just sell a few more cars or a few one offs. That just won't drive profits. Look at what just happened to the stock. Marchionne was surprised. He needs to understand it is not about what you have done but what you can produce in the future. The analysts don't get the growth story for good reason. For all of us we can love the brand but you don't have to like the stock. It will be very hard for Ferrari to access the capital markets given the already leveraged balance sheet until they figure out how to grow profits.
