legal vs. practice are two different things. Legally they can, practice they don't but they just do it a different way. MSRP is never MSRP. If you have never bought a Ferrari and walk into a dealer and buy your first one without financing and any other restrictions then you can say you bought it at MSRP. Finance/clear bra/trade-ins/commissions on past/future sales/involved in paid ferrari events, etc. then you cannot say that you bought the car at true MSRP. There are in many cases several hundred thousands of $$$ already built into your MSRP buy.
No one can tell Ferrari dealers what to sell a car for. They could advise against it and threaten giving allocations, but they would lose money buy not giving allocations and the dealerships customers the cars they want. Plus a dealer could sue the manufacturer and it could start legal proceedings. They are hindering the franchised store from making money. Ferrari isn't going to come in and buy the dealership or make them sell it. There are plenty of Ferrari dealerships for sale already because they aren't that profitable. Porsche is a perfect model for this. Customers were pissed the last few years when they started charging adm's for gt cars or making them buy a panamera in order to get the car they want. Nothing happen to the dealers that were doing this, at least nothing I know of. A dealer around me that was doing this, seems to be getting more allocations of gt cars. With Ferrari being a public company, the flood gates will open up and dealers will charge whatever they want like porsche dealers do.
I think this is the case. I believe the mnfrs provide guidelines but but dont necessarily dictate how to sell. I do agree that they may penalize dealers for not playing ball by providing fewer allocations. The dealers have bills to pay and if they have a special in demand model they will try and milk it. I guess it is easy enough to ask someone.
From the porsche configurator in the United States once you configure a car on-line : All information is subject to change without notice. Neither Porsche Cars North America, Inc. nor the manufacturer can accept liability arising from the use of any information contained herein. Only an actual invoice issued by PCNA at the time a vehicle is sold to an authorized Porsche dealer may be used as an official indication of equipment and pricing. The Total Manufacturer's Suggested Retail Price (MSRP) shown excludes taxes, title, registration, other optional or regionally required equipment, and dealer charges. The price and availability of Individually Commissioned Equipment (CXX) can be determined only after review and analysis by the manufacturer. Actual selling prices are set by dealers and may vary.
Oy, more ADM talk ... But since we're here I'll say this, and I'll get some heat for it. I know there's a lot a badwill towards Porsche dealers because of all the attitude and ADMs many of them were charging on their GT cars. Also for taking and holding people's money for years under some internal priority list only to give people's cars away to someone coming in at the last minute willing to pay a few $k more. Although most Porsche dealers didn't actually do this it built up for a lot of resentment over the years and those chickens are home a 'roosting as we speak. All of that said, I personally much prefer the ADM model to the 'buy a car you don't want to get the car you want' model that Ferrari has been using (as have some P dealers with the Panamera), and that is in fact why I still to this day have never had any interest in dealing with Ferrari dealerships. The ADM model gives you certainty and is somewhat reflective of the supply/demand equation, even if that equation is slightly distorted by speculators and dealers holding inventory back to create false scarcity. That aside ... let's say I just won the lottery and never bought either a P911 GT or a Ferrari. The Porsche dealer might say to me it's $50k over for a GT3RS allocation or for the one sitting on the floor. I can say yes, I can say no, but I know what my all in price is, I can can go back and see what these cars have done historically and I can make my decision accordingly. Only one variable which is the purchase price, and hope for the best in depreciation when you sell it. Whereas the Ferrari dealer will say to me if you want a Pista you got to buy a bloated Lusso or a Portobello. Aside for the fact that historically those Ferraris tank a lot more in value than the market ADM for the car you want (for example a Lusso can go down $100k in a year whereas a Pista is selling at $50k ADM), you also have to go through the process of buying, paying taxes, owning, and selling a car you're not interested in, with complete uncertainty of how much it's going to end up costing you. And if all of this wasn't enough, Ferrari decides to change the game mid-stream and go full McLaren on you by cannibalizing its own 'special' Pista with the F8, something that Porsche never does with its model range. Personally I would much prefer that Ferrari dealers charged a market value ADM that would fluctuate based on the demand of the car. I know I don't complain when I get a 10% discount on any car because supply is greater than demand so reason dictates that accept it when the equation is not in my favor, or I don't and pass on the car. The really interesting part in all of this is that so many people accept as a positive sign of goodwill by Ferrari dealers this idea that they are MSRP dealers as if it's a principle stance, when in fact the reason they do that isn't because Ferrari makes them stick to MSRP, but because they actually figured out that they make more money out of their customers, move more unwanted inventory which makes the parent company happy, by not doing ADMs. It's brilliant marketing really, give the impression that you have ethics and take more of people's money in the process.
Doubt Ferrari will ever produce VS/production or time limited vehicles at the level of Porsche. Porsche didn't give a sh-t about ADM's because their solution was to increase volume. 911R's getting $100K premium, build 911 Touring. GT2 RS and GT3 RS commanding $25 to 50K ADM's, keep building more units until demand died down. You think Ferrari is going to keep building Pista Spiders and 812 GTS until everyone who wants one gets one? Even if they wanted to they don't have the production capacity Porsche does so it may come down to logistics. Agree with you. If Ferrari Additional Dealer Markups exist and are pervasive, why doesn't boobernackle post some new untitled Ferrari vehicle Monroneys sticker with ADM that he took with his own camera?
Except a Porsche dealer would say 35k adm and you reluctantly agree and when the car comes they say 50k! F those guys. Worst dealers ever!!
There is a counterpoint to this. I used to run a car business that sold a certain brand, usually to older people - small, easy to drive cars. We had a cheaper small engined model and a more expensive larger engined model. The government introduced annual road tax changes meaning customers had to pay something like £150 extra for the larger engined model. Sales stopped (literally). We made the cars similarly priced, a benefit to the customer of £1,000. Still no sales. The lesson? People do not like to pay tax, even when there is ‘value’ in them doing so - the £1,000 saving would have covered 7 years of additional road tax but still they didn’t go for it. The problem with ADMs is it’s like a tax. You are paying money for no added benefit other than someone is able to charge you. The difference in the Ferrari model is that at least you are buying an additional vehicle and receive the benefit of that. If you really don’t want the vehicle, don’t buy it. If everyone did the same, the cars would get supplied to those who had bought the most cars that they actually wanted - which seems reasonable to me. I’m not sure what else we should expect of Ferrari? Though they are excellent at marketing I don’t think this is marketing at all. I think it starts with dealers who would have to face customers and tell them they can’t have a car after they bought 6 cars in the last three years because someone just happened to walk off the street with no purchase history 10 minutes ago. Ferrari dealers’ biggest issue is not selling cars but managing alpha-wealth demanding customers, their egos and sense of “if you don’t do what I want I’ll take my $1m dollar custom elsewhere”. I know all the VIP clients at my dealer and the way the DP successfully builds trust with them. This is completely blown with a ‘first to deposit, first served’ approach and would be highly embarrassing for the dealer. This is combined with Ferrari themselves wanting to ensure that they look after those repeat, loyal customers so that whenever they launch a new car they know production is sold for two years which gives them enough time to check how the market is doing and plan ahead once the capital cost of a model is spent and before it is yet recouped by sales. It’s just common sense and I believe there are other reasons Porsche don’t do it this way. For example one theory could be because they have less control over their dealers with GT products because they are far more concerned with the higher volume product where target-hitting is essential for Porsche. I would hazard a guess that most of a Porsche DP’s conversation with his/her regional manager would not be taken up with the small-number GT cars. Having said that, in the UK there is a speedster that has appeared on the secondary market with supposed repercussions for the dealer from Porsche. I suppose my point is that manufacturers manage their dealers for what is the greatest pressure on them (should seem logical). For Ferrari, it is meeting super-wealthy customers’ needs so they stay loyal and keep buying and for Porsche it is making sure that they move the massive production they now have to high quantities of less wealthy, middle class buyers. For reference I own and love both brands.
Can’t say for the US but can certainly say for the UK (and I believe human nature is similar) the law theoretically prevents certain things but dealers usually choose not to go to war with the manufacturer because they believe it never ends well for them. There are still too many things that the manufacturer can do, such as favour other dealers with allocations, something still entirely possible. But you can decide to toe-the-line if you believe it is the best way to manage a long-term stable business. And that is usually what dealers do believe.
Perfectly stated. I think Ferrari’s approach is very logical and simple: build fewer cars than public demands to maintain that special lust for their product. People always want what they can’t have. Reward you loyal customers, which furthers the mystique and “street cred” of those owners. Makes perfect sense. One thing they do that doesn’t make sense to me however; if you know V8 and V12 2+2 aren’t as in demand why use up valuable assembly-line time and workers building them, use that capacity to make more of the desirable models. I suspect there is still excess unfilled demand left in the desirable more special cars. And they won’t need to irritate people with trying to move excess less desirable product.
I've wondered the same thing...it seems that Ferrari has this strange penchant for producing these wallflower cars that it seems even they don't like. Makes you wonder if they were just trying to keep their engineers and marketeers occupied.
Well, obviously people are willing to do it or the model wouldn't work. That said it'll be interesting to see what happens moving forward because as I said, Ferrari is changing said this business model mid stream, where they are not protecting their 'special' cars any more and are building equally performing and very similar looking easily accessible cars right alongside the same assembly line. The point that I was trying to make however isn't from a psychological pov. If a buyer wants to part with $50k more of his money and go through the logistics of purchasing, owning, and selling a car they don't want to get the one they do because they can't get the semantic difference between adm and tax, that is their right. Personally I'd like to know how much it's going to cost me to boink Adriana Lima without having to pay to boink Roseanne Barr to get to it, but that's just me. My main point is that there seems to be this general sense of pride from customers that Ferrari dealers are msrp dealers where Porsche and other brand dealers are not. That's not from a sense of righteous morals and ethics from virtuous dealers, it's from the accountants in the background that figured out that they get more money out of their customers and from the dealers that figured out that they can move more inventory this way, but none of it benefits the customer any more than ADMs from a financial pov, in fact the opposite is true. (I'm only talking about people walking into any dealer without any prior history with a brand)
Anyway, Ferrari and Porsche are vastly different in their product line and volume. The adm thing isn't historical to Porsche because up until a few years ago you could walk into a Porsche dealer and get pretty much any car you want. They had to create the VIP program just to get people to buy 918s. Then through a confluence of events, first the limited run of 997.2 4.0 3RS and 997.2 GT2RS started doing very well on resale, then just as we came out the recession and people wanted GT cars with money in hand they started catching on fire and halted production which distorted supply, and all of a sudden you had lines of people, half of them with no interest in the cars other than as a means to make money or to have a fast car that they can drive essentially for free, trying to get cars. All of this crescendoed with the 911R. Most dealers at that time were msrp dealers ... some still are but many eventually got tired of seeing customers using them to flip cars so they said why are we giving this money away, we'll keep it for ourselves. Of course this resulted in getting some good customers that actually wanted the cars caught up in it as well. Even worse they started keeping allocations for themselves instead of giving them to customers to create admable inventory for themselves. It became a shltshow which created tons of badwill and as a result that world is collapsing before our eyes. Everyone almost collectively said I'm done with it at just about the same time, and the 991.2 GT2RS sealed the deal because Porsche made so many of them that all the speculators and customers who paid adms lost their shirt as they were all trying to get out at the same time. So now the market is somewhat healthy because as it turns out Porsche, other than in 2015/16, were making enough GT cars for real customers all along once you took out the speculators. So now you can walk into a dealer and get any car you want short of a 'numbered' model at msrp or below, and gone are the days where you could keep trading your six month sub 500 mile car in and the dealer would give you sticker back for it. And all of this mind you whilst the economy is still strong and not in a recession. People have memories and do remember how they were treated when for a brief period a dealer had the upper hand when down the line the dealer needs them and the customer has the upper hand. There is a lesson in there for Ferrari as well, although dealers have never been known for their macro thinking,
My personal opinion, and I may get laughed at for saying it is (god knows I am used to be mocked on FChat for many years): ALL Ferrari's, as in every single one of them built, should have their VERY BEST technology in them ALL the time. By "best" I mean a car designed by and geared towards people who love a legendary quirky Italian exotic F1 racing company. I mean the best software, the best suspension, the best engine, the best brakes, the best exhaust, the best design THEY want at the factory (you don't have to love it, don't buy it). So, no Speciales, Scuds, TDFs, Pistas, etc. You as the customer get to spec the design to be more track focused with alcantera, stripes, 5-point harnesses if you want; or the SAME car dripping in leather with bluetooth and high-end stereo...your choice. I picture the Speciale of 2015....buy it like the launch car, or drip it in leather....there is no such thing as the 458 Italia...they're all "Speciales." Yes, the suspension will favor a track-focused exotic sports car demon, but they can still make it comfortable at the same time. I don't think it is a "physics truism" that performance means the suspension has to be harsh...I think you can be just as fast with some compliance in the suspension. If you want a Bentley or an Aston...go buy one of them. Ferrari should never try to be a car company for ALL wealthy people's interests.
I don’t think what you are saying is laughable. It’s actually pretty reasonable from the car enthusiast point of view. But, that would not be a great business model if a company wants to increase profits and make more money....
Agreed. But I would run it like the Sterns who run Patek Philippe. Exclusive, just the best, increase the price. One of each: rear-mid-engined V8 coupe + Spider; front or rear V12 coupe + spider, front-mid-engined V8 and V12 2+2, Iconic halo.
That literally made me laugh out loud! Having said that, I still prefer Ferrari’s business model to Porsche’s - maybe because driving an FF, Lusso, or Portofino is pretty awesome compared to that alternative that you presented. Sent from my iPhone using Tapatalk
What's the internet without a little hyperbole. But that's why I said what I'm noting is only valid in a scenario of a person walking in off the street without any history with either brand. If one likes the lusso, or portofino, or other cars and they were going to buy them anyway then this isn't applicable ... one gets the cars they love, they accept that they will depreciate, and they build a relationship with the dealer organically that will eventually give them a shot at the rarer cars as a natural byproduct of what the customer was going to do anyway. But the same can be said of Porsche ... in 15/16/17 when the market was crazy for GT 911s, even the most unscrupulous dealers gave allocations to their best customers who had a history of buying Pannys and Cayennes, it's just what they did with the rest of their allocations that rubbed people the wrong way. So this scenario is consistent with dealers of both brands.
The evolutionary trend in regular production super cars in the last 15 years has been towards greater refinement, comfort, stellar capablility, and blistering speed. These cars have become more insular, isolating the driver from the road. Raw, engaging and visceral thrilling driving dynamics are now relegated to the special edition so called " track focused " cars. It has become the norm that with the introduction of a new model, the track focused version will be introduced sometime subsequent and at a substantially higher price.
Exactly. But leave refined and insular to Mercedes, Audi, Aston, and Jag (and numerous others....). Ferrari is an exotic Italian dream car built by an F1-derived company started by a singular personality who only cared about racing and super exclusive (hollywood, princes, etc.) road cars. Every single mid-engined V8 should be a Speciale or Pista. Every V12 should be an F12tdf. Increase the price to be north of where they are now but less than Pagani. When your engineers advance to the next level of technology....build the new model. Allow people to make their Pista “comfortable” if they want...but it is a Ferrari....a stallion rearing back and launching itself down the track.
The reality you pine for is long gone. Ferrari of 2019 bears little resemblance to the company that Enzo was inspired to create with a pertinacious mission to build the finest race cars in the world. The rapid progress of technology, coupled with economic exigencies and the shift of the archetypical Ferrari buyer exerted its unrelenting pressure in transforming the company and the cars it builds to appeal to a different, less razor focused clientele.The spirited, raging stallion has been methodically tamed so that a broader base of riders can climb on without being thrown to the ground.
