Fake Ferrari from Wall Street Journal

Article from WSJ online.... interesting... none of the picutres looked remotly like a Ferrari to me....


It was the ultimate face-lift: a sporty red Ferrari F355 on the outside, a used Pontiac Fiero on the inside.

That was enough, apparently, to entice wannabe Ferrari owners to plunk down €20,000, or about $30,000, for the chance to own an approximation of the real thing.

Yesterday, Italian tax police, the Guardia di Finanza, busted up a ring of auto-body shops across the country that were trafficking in one of the most high-end and high-priced counterfeit cars of all time.


See photos of some fake Ferraris.
The ring operated in a dozen cities from near the Alps in the north to Sicily in the south. Tax police rounded up seven completed fake Ferraris, as well as another seven that were still being decked out. Some of the counterfeit cars had already been sold. They also seized numerous spare parts, some of which were genuine Ferrari. Eight people were placed under investigation, but no arrests were made.

The head of the Palermo unit of the tax police, Guido Mario Geremia, who spearheaded the investigation, said it involved "a sophisticated operation that was running throughout Italy."

The global counterfeit industry has been one of the world's most inventive, churning out knockoff copies not just of Channel handbags and Gucci sunglasses, but also of products ranging from high-end wines to pharmaceuticals, telecommunications equipment and videogames.

Even by those standards, copying a Ferrari seems particularly brazen. The company makes about 6,000 cars a year, and waiting lists for new models can run years. Most cost more than $200,000, but prices can soar far beyond that depending on the level of customization. The company boasts that its engineering -- much of which it also uses on its championship Formula One racing team -- is second to none.

So who would dare buy a fake? "There are people who buy fake Louis Vuitton and Gucci bags, so it's not so strange that someone would buy a fake Ferrari," said Mr. Geremia.

Mr. Geremia said he began working on the case six months ago based on a tip. He was able to trace the different cars and fake parts to cities throughout Italy, where specialized auto-body shops would strip down the body of the old Fiero, including its bumpers, hood and rear, and then mount parts to build the fake Ferrari.

Once assembled, the fake Ferraris looked pretty close to the real things. At least when standing still. The Pontiac Fiero, whose production cycle spanned the second half of the 1980s, was considered a peppy, if not so dependable, two-seater. Still, its V4 engine is no match for the V8 under the hood of the F355, which boasts a top speed of 183 miles per hour.

In a few cases, Mercedes and Porsches were used as the underlying cars instead of Pontiacs.

Ferrari SpA, a unit of Fiat SpA, had no comment on the investigation. Spokeswoman Mariella Mengozzi said the company works side by side with authorities in Italy and abroad on these types of investigations.

Last year, fake Ferraris were nabbed by the tax police in Sardinia and Rome. In 2006, the European Commissioner for Justice, Franco Frattini, protested publicly that fake Ferraris were popping up in China.

The ring uncovered yesterday included salesmen who promoted what they said were "replica" Ferraris over several Internet sites. They also operated showrooms where the cars were displayed. Others provided parts, from headlights to steering wheels.

The latest figures from the World Customs Organization show that all types of counterfeits result in about $500 billion to $600 billion in lost sales annually, which is about 5% of global trade.

Harley Lewin, a partner with New York law firm Greenberg Traurig LLP, who specializes in counterfeit issues and isn't involved in the Ferrari case, said that even a few fake Ferraris on the road could harm the company's image. "It starts to taint the brand," he said. "It becomes a big deal; all of the sudden legitimate products start to lose their color, their appeal. The fake cheapen and diminish the real thing."