Ferrari is not making enough cars.

I am sure Luca and company have considered all this already.

 

I dont think oil has anything to do with it at this point; but ferrari is in a tough spot bc they cant do very well as a public company imo; too many priorities will be compromised and ruin the company; shareholders will not stand for exclusivity and racing. they want tons of cars sold; more cheap cars; etc. the best thing for ferrari is for a stable larger company to purchase like toyota as you said; imo.

 

Good topic. Enzo had it right in the 70s but was over ruled by the americans: Protect the sacred exclusivity of the Ferrari name and car through continued lower production, say 3000 or less. Make up for volume with a different but associated brand such as the 'Dino' name that everyone knows is a Ferrari. A lot of Ferraris profitabilty is from the exclusivity of the name and small clientele, but with exposure through F1. That exclusivity is clearly Ferrari's greatest asset, and would be damaged and weakened by producing more cars. I do agree that they need a volume model - enter the 'Dino', just as the founder had envisioned 30 years ago, and even before with the ASA project. Enzo always knew that a volume smaller and associated brand model..as the original Dino sales literature stated: "almost a Ferrari"... would be the secret to the cash flow.

My suggestion would be to keep the 'Ferraris' as they are now at 3000 or less per year and come out with a small lightweight 6 cylinder Dino, a little bigger than but in spirit with the Elise, priced slightly higher than but competing with the Elise and Cayman. It is a shame that Ferrari or Fiat did not develop the Alfa 8c as a 6c to capture this market. Right now, the magnificent Cayman is the car to beat in that market and the Italians will only be able to take it on with styling, which is their strong but inconsistant suite. Pininfarina is lost right now (imho), and the Alfa 8C (winner of Villa D'este elegance awards and the sensation where ever it is shown) is the direction I wish they would go.

 

The worst thing Ferrari could do financially is to increase production. Right now they have the enviable position of being to sell all of their production without discounting. I would not worry too much about Ferrari being able to survive.

 

If there was one company I would love to own for the next 50 years....it would be Ferrari. It has everything a business owner would want and more.

I think they are doing just fine except they need a "hands off" cash rich parent company to give them added stability.

It would be nice to see them come out with a sweet little 6 cyl....something like a Dino of years past. Nothing really fast etc...Just a good road car that ignites the passion of Ferrari ownership.

 

Luxury cars are the most profitable cars

and Ferraris sell for a high profit to goobers like us

I dont have any worries about Ferrari's future profits, as long as they stop churning out Fugly Crap like the Schmenzo & the 612

 

I dont disagree, but If it was for 50 years I think I would want to take over the Playboy Corporation!

 

Yeah, yeah, I know you old farts like to gripe that Ferrari is making too many cars. You sit in your leather chair in the Old Boys Club sniffing your brandy (at 10:00 am ) and make pronouncements like, "Back in MY day, you had to have stoke with the old man to even get to look at a Ferrari."

Dr. Who, I only partially agree.
1. I'm an old fart. Turn seventy this month. Never owned a Ferrari, but hoping this is my year.
2. Yes, too many Ferrari. I see half a dozen 360/430 daily in Newport Beach. Local Benz dealer sells 1,000 new cars per month.
3. Circa 1961, I was told Ferrari would not sell you a car unless you could demonstrate driver skills to own one. Through someone with "stoke" I was offered a factory 1961 250 SWB for $4100. Had I made the purchase (age 25) it would have been a death sentence. I can't handle brandy now, but drank it like ice tea at that time. Bought a '57 GullWing instead and got in upside down after two weeks. See what I'm saying?
4. I have the impression Ferrari's real money comes from licensing, not car sales. So, keeping the car precious and exclusive could have a back end reward.

 

Porsche & BMW are 2 family held companies that are also extremely profitable, although they've had their ups & downs

Business is about Profits Period. If you can make Big net profits like Ferrari does its a healthy company. The trick is maintaining that profit into the future

Ferrari is very much a niche market vehicle. There is no way they can compete against Giant Multinationals like Toyota, GM, Ford etc at their own game so they need to stay in their niche or they will be destroyed

 

I think Ferraris F1 racing is probably funded 100% by sponsors, nice trick, especially w $300M or so per season

BTW, Gullwings are sweet

 

I think Gary is right: Ferrari's profits are more related to shirts, jackets, cologne, phones, clocks, posters, pens, luggage, bicycles, scooters, gloves, ties, backpacks, lamps, toys, models, shoes, etc. After all, this is pure licensing revenue from products that other companies are developing and marketing - Ferrari just creates an image with the cars and the racing and licenses others to sell that image.

I suppose that spare parts and replacement components (mostly licensed as well) are also big money makers.

 

There's a reason why they're only producing 5,000 cars a year with a state of the art, high tech manufacturing facility. It's because they don't have to rely on car sales. Their focus is maintaining the exclusivity of the brand and the rest will come.

Now if their F1 team takes another dive this year then they may be in for a little trouble

 

I don´t agree with several things: (of course I agree with others)

I don´t have data but I´m convinced that although they make money with merchandaising they also make money selling cars.

I don´t think Ferrari should make a car comparable wit the Elise, F should mantain in it´s "niche"

Look at mercedes, they started with the 190 and they´ve ended with A-B class, I think they are doing ritghly but please not FERRARI. If F is not exclusive it would take part of the magic.

In my opinion if someone want´s to go in the "entry" level try buying a 348, 355 etc, they as the same price as the cayman.

And, I finally agree with the big question: what about F1 "GPrix", I´m sure and I have faith in the effort they´re gonig to make this year.

Nice talking to u all

 

This is always assuming that "cars" will still exist in 50 years time of course.

It wont be long before cars drive themselves, on highways/motorways very soon. Then ultimately people wont need to drive (autopilot) the roads then resemble a rail network, and for safety's sake people wont be allowed to use a human controlled vehicle publicly.

I am afraid we have lived through an unusual period in history where everyone had a personal form of transport that required them to develop quite high skills to control etc. In times gone by the majority of people walked or relied on public transport (except those that could afford a horse, but by "times gone by" I am talking pre:USA) - it'll come full circle, its just that the bus of the future will carry one person, be owned by individuals and be driven by a robot.

That will also see the death of motor racing (no requirement to learn to drive = no interest in watching people drive), well actually, that will already have been replaced by "virtual racing" anyway - much safer to sit in a sim than the real thing. Society will not allow motor racing once computer graphics look real.

All in my opinion of course - and precisely why I am glad i'm not immortal

ps. Have you guys heard about the EU moving to ban motor cycling - completely? Sweden planning to do it within 10 years or so apparently.

 

HONDA should buy em

they already built the NSX, which Ferrari took ALOOOOT of ideas from

 

Why? They're profitable. Are you suggesting they pull a Coke and change a winning formula? Change for the sake change!!

As for F1, I hope they do better, but having just recently lived through an 19 year drought, let me tell you it will not be the end of the brand if they do struggle.

 

Air bags ? No big deal; put in the Camaros steering wheel a-la Lotus.

 

Increasing production would be very risky for Ferrari. Why? They are at the top of the economic food chain. A worldwide recession could crush sales as would a run of poorly received products. If their fixed costs were set to make 10K cars a year and all of a sudden they could only sell 2K. No more Ferrari.

Dave

 

I agree with most of the other posts here: Ferrari needs to stay low volume, or the exclusivity of its brand will be diminished. You'll always see a few every day in places like Newport Beach, Beverly Hills and La Jolla. As long as Ferrari sells every car it makes, in advance, at a huge markup, I think they'd be idiots to "aspire" to mass production.

Profitability thought of the day: I can't believe no one here has mentioned the spares business Ferrari owns. They should really give away 348's and control and expand the service/parts end of the business. How do you not make money servicing a car that demands engine removal on a regular basis? This is the best business model on the planet!

 

I agree. The great man Enzo had it sussed. "We build one less car than the market demands"
Such smartness ensures exclusivity (and slows down depreciation) whilst Ferrari makes huge revenue from F1 sponsors and lifestyle merchandise. Ferrari is the only brand out there that doesn't advertise - it doesn't need too. Perfect - Job done !

 

I'll never worry about Ferrari as long as they are able to sell all their cars (Enzo, etc.) before they build them to a line of waiting people a mile long with money in hand.

There is/was a Porsche GT (or whatever their "Enzo" is) just sitting in a showroom here in town. They can't give it away. That is what happens when you build on Porsche's level.

 

....how 'bout sitting in the backyard after work, smokin' cigs, drinking bud and making pronouncements?

 

LOL tell me about it, I have to dig up $3k for a set of 12 injectors that Ferrari probably buys from FIAT for $30.

I'm sure Ferrari made 100% on each Schmenzo + a hefty profit on all the 360s, 430, 612, 575 etc

Porsche may beat Ferrari on the track but Porsche needs to go to Ferrari school to see how making huge profits selling high end exotics is done

 

So if Ferrari goes bust, how much will my Boxer then be worth?