Bloomberg: Ferrari is Recession Proof

I don't think it's recession proof at all. In fact, I think right now things are a bit slow until the new spider is in production and the new 599 comes out to fill out the V12 line.

What's interesting about Ferrari is that it's a low production manufacturer that sells in a global market. So, as one market stumbles, it can shift production to another. Just a few hundred cars can make or break a month's production, this is a big advantage for them.

Maserati has huge potential if they can get past the small US dealer network. Many would like to consider this as a step up from a Lexus or Mercedes but they don't want to send it hundreds of miles away just to get an oil change or some minor repair.

People do like Italian cars. They just don't want to suffer to own one anymore.

 

They shouldn't have to.

A car like an Enzo sells itself on performance and pedigree, and most people can look at something like that and tell that it isn't made for every day use.

A Cali or a Maser GT on the other hand...

Both have "DD" written all over them. They aren't much different (in idea) from an Infiniti G37S. A dealer network and running costs lowered by 20% would help a lot.

 

The main reason for the so-called recession in the West (which is not really recession as its a permanent economic adjustment) is the movement of the worlds wealth from West to East, especially China. This means a supplier who sells to Asia is indeed recession-proof as loss of sales in the West are made up in Asia.
This is happening with many luxury goods from Scotch Whisky to Prada handbags, sales are booming globally, mostly in China.

 

Another couple data points supporting that idea: When I visited Maserati and Lamborghini at the end of July, both of them said that their #1 market is currently the US and #2 is China, but they expect those two positions to switch as soon as 2012.

 

Remember that China has a 100% tax on new imported cars. So, that Maserati costs double what you would pay in the US.

 

+1. Its replay of history. Its just going to back to how it was before. China and India combined had greater than 50 percent of worlds GDP in 1700's. Its only a matter of time before China catches up , China already is projected to become the largest banking system in assets in 2 years , next comes bypassing the US GDP.

 

Holy smokes! I had no idea. So that means, on a cost basis, China already spends ~2X as much on exotic cars as the US!

 

They're also known to tweak their production on the slower-selling models in order to "sell out." Which is smart from a business perspective but it isn't because the buyers are clamoring for every single model.