Ferrari sales to slow with new laws and economy?

I can't say what I really think without crossing over into P&R, but I am livid, LIVID at the entire environmentalist movement.

 

I think the days of economic issues affecting Ferrari sales are over. There is so much more wealth around than there was back in, say, 1991, when Ferrari couldn't give away cars.

Buyers of new Ferraris these days are for the most part immune to the ups and downs of the economy. And even if a few are not, there are way too few new Ferraris to go around for the many who want them.

Here is one example. Look at 2001-2002. Those were terrible economic years after the 9/11 disaster. Yet 360 Spiders were selling at at least 100K over sticker while coupes were selling at some 50-70K over sticker every time. And the waiting lists were several years long.

My purpose in owning these cars is not to drive fast. I see the aesthetic beauty and the engineering genius in the cars. They are pieces of art that happen to be cars that happen to go fast. But the intrinsic beauty of the cars make them worth having, in my opinion, despite the draconian laws that have come and that are sure to come.

 

I drive a 328. Just buy an older exotic, pop the top, and quit the stupid horsepower race. My Ferrari's more fun at 70mph than my Audi is at -- well <cough>, more than that (from what I hear, anyway )

Exactly.

 

While I agree with you that there is a portion of the potential customer base that is more or less immune from a recession, overall I would say that as goes the economy, so goes demand for Ferrari in large part. Actually that applies to any ultra-luxury good, which a new Ferrari certainly is. They may sell all they make, at sticker rather than buyers flipping them for $100k more. Makers like

The period immediately after 9/11 was not technically a recession, it was basically a step function hit in the economy from which we quickly recovered. Also during that time the RE market was starting to go nuts. IMO, we are in a more precarious position now than on 9/12/01. The RE bubble has run its course and will almost certainly overcorrect to the downside. The dollar has fallen greatly against the Euro, making that Ferrari all the more difficult to afford for those heavily invested in RE. Worse yet, inflation seems to be creeping back in as energy costs have greatly increased (and thus put pressure to increase prices on virtually everything else).

As for the relevance of a car like the 599, I don't think it matters to those who might have the means to purchase the car. Whether it gets 9 or 29 mpg, people that want one and can afford it will buy it as long as it is available. I don't see the government regulating acceleration numbers or top speed any time soon, it is up to the potential owner to restrain himself on motorways or else decide if it is worth even owning one at all.

 

Anyone that says that the economy won't have an affect on Ferrari sales has a memory shorter than 15-20 years. While the ceiling is much higher than it was then, and the floor might have risen too, they are still far apart and things can certainly come to a fast slow down. I do not think that environmental laws will have much of an affect as Ferrari has shown a great ablitiy to adjust the product line in the past, but the economy can certainly hurt sales numbers.

 

The economy has already affected sales and service from the dealers that I have talked to in the past couple of weeks.

 

Is there any car out there that you can't get in trouble with? Given the right (wrong?) frame of mind you can loose your license in a Kia.
If you want to use your F car at its limits try a track day. Its a great way to both enjoy your car and work on your driving skills.
As far as the state of the market who knows? On the one hand there is enough wealth in the U.S. that will survive most any event to support Ferrari sales. On the other hand if things get bad who wants to be seen engaging in such consumption? Granted this would effect the lower end of the F car market more than the mega-collectors whose cars are rarely seen in public anyway. The used car market would take the biggest hits with leveraged cars being dumped when the owners restructure.

 

It's possible. Government regulation (mainly smog but also safety) along with high insurance and then gas shortages killed muscle cars in the early 70's. It is difficult to use the full capability of my 430 on public roads. 3rd gear redlines in the 90's. There are days I enjoy the 328 more because I can run it closer to the limits. Track days are an entirely different story however.

Dave

 

Economic issues have always affected Ferrari sales and are again. While it is true there is a lot more wealth around now, it is also true there are a lot more cars. Ferrari is selling 3-4 times as many cars in the US as in 1990 not to mention much more competition from other exotics where there was virtually none in 1990. I'm sure the same things were being said in 1990 when 328's were selling for as much as 200K. By 1993, Ferrari dealers (the ones that were left) had to heavily discount cars to sell about 100 348 SS's and some 512's. 360 coupes were selling for 250-275K at the peak in 2000. They took a big dump in 2001-2002. True, the first spiders sold for maybe 75K over, but that ended quickly as well.

Some Ferrari owners are wealthy enough that the cost of a Ferrari is chump change, but the majority do not fall in this category. That's why so many are financed. A large portion of buyers are small business owners such as myself and we are feeling the pinch. How well do you think residential construction contractors are doing these days? If you are an upper level exec, especially in a financial field, you may be worried about your job or may not get an expected bonus. All this takes a toll. Even if a business owner has not felt a slow down yet, if he is smart, he is looking around and deciding this is not a good time to get extended buying toys. If the pool of buyers declines by 20%, that would have huge impact on resale prices which, in turn, will affect new car demand. No more flippers and even people who buy them to keep may back out because the ownership cost in terms of depreciation is far greater than before.

Dave

 

+1........well stated.

 

As mentioned before, speed is definitely not all that Ferrari has to offer. You buy these cars because its your dream. They're exclusive, exotic, luxurious, stylish and somewhere down the line there is fast. I did not fall in love with Ferrari's for speed, I fell for those 348 strakes down the side and the fact that I'll see one in a whole summer - and hell, it'll make my month.

 

It's not losing the license, it's the impounding the car that would hurt (except in the case of the KIA).

 

Hi Dave,

I have to respectfully disagree and say that this is incorrect. The 360 coupes never took a dump. They sold over list until the very end of production. In late 2002, when my Dad got got his 360 Modena, 360 coupes were selling everywhere for $200k. He got his at $185, and that seemed cheap.

As for the 360 Spiders, don't know what you mean when you say "that ended quickly." The 360 Spiders never sold below $210-220K (retail) during production on the used market with delivery miles. For a long while, they were at some $250K. I even remember the first ones selling for around $280K!

A decrease in sales prices over sticker from a very high level down to a level still over sticker is not exactly an indication of a bad market. That's like observing a decrease in the growth rate of the federal government's spending and then calling it a spending cut. A decrease in acceleration is not a decrease in velocity, as I am sure you know!

 

I have a favor to ask, and I am not being sarcastic!

To whomever who has observed the economy having an effect on Ferrari sales: please let me know where an F430 can be purchased new from a dealer at MSRP. I have some takers in my family.

I really don't think that day is here or that it will ever come. Until it does, I still believe the economy has little effect on Ferrari sales.

Of course, 12 cylinder Ferraris always have been less saleable than the V8 cars due to their enormous prices. So yes, I could see 12 cylinder cars being affected some. But Ferrari has always been smart with these and has not produced too many to get themselves stuck.

 

Not sure about that.
My other business partner just got back from Barret Jackson and he had dinner with Tom DuPont and two of the biggest Lambo dealers and exotics in the country and they all said that if things continue an a downward spiral for the US economy car sales especially exotics will drop as much as $40,000 from sticker price and there will be a flood of used exotics for sale. Remember suggested retail price and actual sellers price are two different things and when they can't sell at there ridiculously marked up price they will be forced to drop and sell products or go out of business.

 

Lambo dealers already discount their cars,I would not count on that from Ferrari dealers ,even with a slowdown of the economy.

 

You are right in case of the secondary (pre owned Ferraris) maybe,I do not believe new cars would be affected(and most new Ferraris are purchased outright not financed)

 

No no! Lambo is not Ferrari! Come on now!

 

If industrialized countries make it too difficult to buy a new Ferrari, China, Russia, India and the mideast will take up the slack. Used Fcars will become even more rare and valuable.

May the horse be with you.

 

Move. OPP have always been draconian in the enforcement of traffic laws in Ontario.

 

I saw this coming years ago. After the Govt made pariahs out of people who drink & drive they turned their attention to speeders, slowly at first

So after getting arrested a few times the message got through & now I usually keep it 24 or 29 mph over the speed limit, whatever I can get away with

Tracks are plenty of fun and Ive never been pulled over there

 

I checked out a Dec. 2002 FML. 99-00 360 coupes were priced at 150-160. These are the same cars that sold for 250+ 18 months earlier, a 40% decline. Spiders were down to 220-225, a 20% drop in just one year. MSRP is a meaningless number, it's arbitrary, selling prices are all that matters. 328's sold for over MSRP for a while after the 1990 bust, but anyone who paid 200K for one would not think that was a good market. Dealers at the time were dropping like flies, even if an occasional 328 still sold for over MSRP. Bear in mind, that 2001-2002 was a very mild downturn in the economy compared to 90-91. The 90-91 downturn also hit vintage cars very hard with many losing 75% of their value.

As far as 430's go, with maybe 2 more years of production, it would not surprise me if new ones can be had at MSRP before the end, especially coupes. If your family members were to call their local dealer and inquire, I wouldn't be surprised if they could get a brand new coupe for 10-15% over right now. With little or no money to be made, many flippers will be getting their deposits back. Already I see some used coupes selling below original MSRP.

Dave

 

Hi Dave,

I applaud your research. However, I must disagree again because I have seen that the Ferrari Market Letter is a cursory estimate, at best, of the Ferrari market. I have found it to be consistently off. I studied the 360 market profusely back in those days both before and well after I found my Dad's 360. There is no way that 360 coupes were selling for 150-160 in 2002 or even 2003. But let's agree to disagree and move on because you obviously have your sources, while I have mine.

I also would be interested to know of any low mileage (<1,000) 430 coupes selling below MSRP. If a 430 coupe has thousands of miles on it, then sure, I'd buy it if someone told me that it sells under MSRP as a used car in the current environment. But the almost-new ones? Please provide me with some sales ads or other links because I have not been able to identify any low-mileage 430 coupes selling below MSRP.

 

Over what do you actually preside?