Disgusted by Ferrari's Policy of Selling Their Cars...

one of the things that makes Ferraris so special is their rarity thats why Montezemolo will not increase production to meet demand.

 

The high values and high demand, with the low supply, are good for Ferrari. They are marketing a high-end luxury product. They are not a typical mass-producer. It's a Ferrari, not a Pontiac.

A large portion of their revenue is from licensing, and the licensed products sell because it is a brand that almost identifies itself as unobtainable - and those that have the cars have reached a special level of success. That's exactly what *exclusivity* IS by definition - excluding people from buying one. This is floating Ferrari's brand value.

You are only seeing it from your side as a consumer. But frankly, it's not healthy for the company to be giving discounts on the product - look as US manufacturers losing money on most of their cars because they have to give their margin back in rebates and offers.

What Lamborghini has done is not necessarily commendable - because it means that the have not fulfilled their corporate duty to maximize profits - they have saturated the Gallardo market and diluted the true market value of every car. That's a bad thing for the company, and Audi is absorbing that loss.

You are merely complaining about the results of a healthy market meeting an equilibrium price. But if you really want a 360 Spider, I suggest you contact board member bananaboat immediately and make him an offer. Click here: http://ferrarichat.com/forum/showthread.php?t=15228

 

In Montezemolo own words Ferrari are selling dreams not just rich peoples toys. Sure they could put the price up and make more cars but would anybody buy one?

 

A F-car isn’t a Porsche or Benz....it is more of a "toy" for wealthy people to drive around on sunny days. No one drives their 360 to work and back every day (not that I know of). My point is that everything about a F-car is exclusive including the people who can own them. I like the fact that everyone can’t go to the dealer and buy a new 360 at sticker. I can and will order the 420 and get it within a year because I have recently waited and bought a new car from my local dealer. I don’t think a one year wait is over kill and not all F-cars are this way. Yes the 360 in general is a hot car but the 550 and 456 don’t post the same kind of resale numbers. Either way this is all a silly game that I and most F-car owners enjoy because we are of the few that ever get to own one of the most amazing machines ever built, Ferrari. That is my 2 cents.

 

Because their ability to manufacture them is limited. They can only produce about 250 360's per month. So, you have to get in line to get one. You should have gotten in line in 1999 if you wanted one. I'm sorry. It's like concert tickets. There can only be so many. But if you want one really bad, go find someone who has just ordered concert tickets and make them an offer.

 

I to am interested to were the mark-up money goes. I thought Ferrari was trying to avoid this practice at one point by telling dealers not to sell there used cars for more then a new one stickers for. Is this not what they tried to do with the Enzo? Isn't this boarding on bait and switch laws? I think somwere in the books there is a law agisnst doing this sort of thing for car dealers is there not? Maybe one of the lawyers on this board can help me out with this one. It just does not seem right to be allowed to do this type of thing. But I guess it's a free markey out there and what ever people will pay you can charge. But I really think there is some kind of guide line. Maybe is only effects on luxury items.

(geez I'm sleepy...I'm going to bed now)

 

I don't know? Seems that after the car being out as long as it has and with so many used ones around seems strange the line would be as long as we are always told. Just my 2.

 

Quite simply you were very lucky! ... somebody must have cancelled their order. I thought this waiting for delivery had been happening for many years.

Pete

 

Only new cars have those FNA guidelines. Used = anything goes. They didn't have any used-market controls on the Enzo, except for carefully choosing buyers less likely to sell (from what I can tell).

Leica - the only way to remedy the situation with economics - other than increasing production - is to raise MSRP to match the market value and capture the margin they are actually LOSING on every new spider. But then, Leica, you would pay $220-250k for a new one - the same price you'd pay to walk into FoH right now and buy a barely used one anyway.

I agree with PsK - you got a killer deal on the 355, because they had loong lists too. That was your lucky day.

 

I think several people who replied completely missed the point, he is not saying that Ferrari shall not be exclusive or Ferrari need to make more cars. He does not even mind(if he wants and affords to) pay $200k for used Modena. His point is that the way the business conducted is not wrong.

I fully agree with that.
Someone here posted before that after owning his Moneda for 2+ yrs, he turned it in and got all his money back(include taxes and etc), and deal probably still made a good 10-20k selling it to someone is too anxious to have the car by paying 200k+ for used. Nothing against the seller at all, but the whole practise is just wrong or unfair at least.
Heck, If I can buy a brand new Modena at list price, I will buy one right now, but I can't. I understand dealers have the rights to look out for their loyal customers 1st, but a newbie like me is gotta start somewhere, no??

Thus, make the car msrp at $280k then, I can not afford it, I am fine with that, that's better than knowing some "fortubate" individuals can own those for free for a year or two, and I am the guy picking up the used car paying more than they did.

 

... thus possibly escalating "used" price up to $300,000 + if production is reduced or remains at current output.

"Be careful what you ask for, you just might get it" or as they say in Texas, "kwitcherbellyakin'."

 

You are right about the Ferrari, the drive is everything you say it is. I have driven both of the new lambos and they are fast, but they are still no Ferrari. More like a really fast Corvette. That is why everyone will wait inline for it. Just like in Car and Driver(i believe), when they compared the GT3 and the Stradale. The stradale was significantly slower in almost every way, but at the end of the day, the said they would want to own the Ferrari more. i have driven lots of porsches too. GT2, TTcabrio, 930 turbo ruf. None of them matches the driving experience of my 355 spyder with the top down. Orgasmic.

 

This is how a dealer can sell a new "used" car for more money than a MSRP car. Every dealer has a "Used Car" outlet with a separate P/L and business license. The "Used Car" store buys new cars "dealer allocation" from the new car dealer at dealer cost, titles them, pays the tax etc, then takes all that cost and re-sells it back to you the consumer at a significant markup and profit to the dealer. Canceled orders etc are just part of the lie and meant to make you feel better about getting ripped off.

MB

 

Wax, that is a great AVATAR of Samuel L. Jackson

 

Sounds like you need to get a Lambo, enjoy!

 

Are you hearing what you are saying? You're happy to pay $270K-370K for a new 360, but cannot stand the fact that you might have to pay $210-250K for a nearly-new one. But if Ferrari did up the MSRP to that, then the prices for nearly new ones would be even higher than they are now. How is this good for us F-car buyers??

Now consider the guy who got on the list in late 2000 or early 2001 and is just now getting their 360. How will they feel when they are informed that due to market demand the price has been doubled?

In fact, I think Ferrari has been doing a surprisingly noble thing by holding their MSRPs steady despite the realization that they could have set it much higher. In fact, its my guess that the primary reason they've been so noble is because they cannot let the 360 price rise to 550/575 levels as that would confuse their product line... and they can't raise 575 MSRP as it already has very limited demand.


In the bigger scheme of things, I look at it this way... and suggest you do the same:

Ferrari has given its buyers a choice... you can either come in at the last minute and buy off the lot for $220K-250K (which you have indicated you'd be happy to do) or you can place your order and wait for 3 years for a reduced price of $175-190K. That's mighty nice to provide that second option. But you seem to take offense at the first option given that the second option exists. I thank them for that second option.

Put your name on the list NOW... and keep your name on the list for each new model... and you, too, can buy a new Ferrari at MSRP, which is somewhat below what the market price would be. That seems like a gift to me! (Don't look a gift horse in the mouth, as the saying goes!)

 

Exactly...

 

>>> Are you hearing what you are saying? You're happy to pay $270K-370K for a new 360, but cannot stand the fact that you might have to pay $210-250K for a nearly-new one.

I prefer that way too.
Sure, I am paying more, but I know I am getting it at the list price, and I know extra money/profit goes to Ferrari, which can be better used in R&D and etc, no one took advantage of me this way. Compared to buy a used for 50k-100k over sticker, I know the previous owner basicly drove for free, and I know dealer made a load as well.

>>> But if Ferrari did up the MSRP to that, then the prices for nearly new ones would be even higher than they are now. How is this good for us F-car buyers??

Might not be good, but at least fair. It will eliminate most of "flipping".

>>> In the bigger scheme of things, I look at it this way... and suggest you do the same:
Ferrari has given its buyers a choice... you can either come in at the last minute and buy off the lot for $220K-250K (which you have indicated you'd be happy to do) or you can place your order and wait for 3 years for a reduced price of $175-190K.

You will be 100% right IF there were the option of getting on the list! But there is NO list!
I could not get a dealer to put me on the list since 2002, so, may I be upset since I was not offered that option??

>>> Put your name on the list NOW... and keep your name on the list for each new model... and you, too, can buy a new Ferrari at MSRP, which is somewhat below what the market price would be. That seems like a gift to me!

Again, it is all talk, you assume dealers will take any buyer on a list, but they don't.
Let me put it this way, I have been to 4 authorized dealers, I ask to be put on the list for Modena, I can wait forever I don't care, I was willing to give a $25k deposit check to be deposited(they can have the interests while I wait, I don't care), guess what? None took me on waiting list. I don't have a Ferrari, I've never done business with the company or dealers, so I am nobudy to be on the list I suppose. So now what??

No offense but if you are one of those that are on dealers's VIP client list, it will be easy for you, they probabely call you to offer you a Stradale once it's available, you don't need to fight for a spot on list. For 1st time buyers or less fortunate ppl like me, it doesn't work like that. That's why we don't share the same view on this issue.

 

Well, to take your money for a spot on the Modena list would be a bit dishonest... since the list is already so long that production will end before all on the list get one. If you were after a Spider, even back in 2002 that was already true. The window was 1999-2001... you missed it.

So, now what? Go into your dealer, and ask to buy a 355 Spider or 360 Spider to enjoy while you wait for your name to come up on the 420 Spider list. Most dealers will sell you a used car and take your deposit and put you on the list... with the caveat that the leftover 360 Spider list will get first dibs on the 420 Spider list once the price/specs are announced.

So, in fact, the window of opportunity on the 420 Spider may be amazingly near-gone. Given that fact, who should the dealers hold spots for? My answer: the Ferraristi that are big enough fans that they will want some Ferrari to drive while they wait... and that helps eliminate the "flippers"... the people that get on the list just so they can flip the car for a profit... if you have to buy a "flipped" car to get on the list, the profit in "flipping" will be lost.

So, in that way they discourage the flippers, without charging the long-time Ferraristi extra-high prices. Pretty nice. And yes, the extra $$ are going to the dealers rather than Ferrari R&D... but consider that Ferrari needs those dealers if it wants to stay in business!

 

I wish that I could look 3 or 4 years ahead in my business and know I'm fully booked. This would cost a lot less energy, and would be very cost effective. So, maybe that is not such a bad strategy.

To ramp up production cost years and if you end up in an economically less good period, you might get into trouble.

 

some other thoughts for the debate....

first, remember that ferrari has TWO types of customers.

the second type are guys like those discussed here who decide one day they want a ferrari and phone up their dealer. this is a goodly chunk of their customers (i won't hazard a guess at the percentage). as these people find out, they get new cars basically at the whim of the first type of customer.

the first type of customer are the guys who buy early and often. once you get into the groove, as madonna would say, of the "buy new and flip" process with your dealer you get to pick early and often - and eventually get access to stuff like the Enzo.

second, don't be misled to draw incorrect conclusions about what lambo did with the gallardo production. they way overproduced initially to get the cars out into the market en masse because ALL of their customers were going to be "the second type" above (cf.). they had no established, repeating customers. in every single case, a gallardo was bought by a guy who decided one day he wanted a lambo and phoned up his dealer. so they knew they had to have inventory. it actually took them a while to clear that out, but it's mostly gone now (absent some stragglers). fwiw, maserati did basically the same thing with the coupe and spyder when they were released - i remember seeing the impressive inventory piled up at FoNE - eventually the dealers all worked through that too.

the NEW market is different than the USED market in a ton of ways in this space. just a ton.

ferrari cannot raise their MSRP on the 360 up to near murcie levels. that would be competitive suicide for the NEW buyers. are they leaving money on the table? from an economic perspective i'd argue they are NOT because if they actually did this, they'd grossly reduce demand and be net-negative long-term. people would seriously consider other $275K to whatever cars instead. for example, look at what most of the Ford dealers are trying to do with their GT allocations. basically they're trying to sell them for $200K a pop ($40K to $50K over MSRP). while there are a few buyers there at those prices, there are a ton of buyers who'll tell them where they can stick that (like me). demand is always elastic - i don't care what you're selling.

but the USED market is a "free market" (in theory), and we all know this and behave accordingly. nobody is setting the price here except the market (in theory). and we all love capitalism, so we don't ***** about it too much.

and let's not lose sight of the fact that that "wacko" pre-owned market behavior is GREAT marketing for ferrari - and free marketing at that!

unless they increase production, which hopefully they will not, things won't change. you have to either get in tight with your dealer (TIGHT) or step onto the never-ending conveyor belt of buy new and flip every 2-3 years, at which point you'll get near the front of the line. many long-time ferrari buyers think the bozos not on that conveyor belt are complete morons for buying these cars above MSRP and out of warranty...

doody.

 

There is a third element that makes this tricky. Ferrari can't raise MSRP because they are a World car. USA has highest demand and highest prices. So we see this silly system where 3 year old cars can sell for more then MSRP.

But the rest of the world won't support a higher MSRP and if the balance gets too far out of wack... then you have the grey market importing of cars becoming a big problem for FNA and Ferrari Dealers... which is a problem for Ferrari.

 

I do exactly what Brian suggested. I leave my deposit at my dealer and have done so since 1999 when I got my Modena. My salesman at Algar is just as big an enthusiast as any of us and he never forgets and stays in contact every spring. I'm sure there are better or worst sales people but Francis at Algar has been one of the best sales people of any Marque I've dealt with. If looking for a used Fcar give them a call, they'll be competitive.