Ferrari to open assemply plant in USA!

Excellent summation. Agreed.

 

No offense but you are wrong, Ferrari of San Francisco is owned outright by Ferrari. Mercedes Benz owns a big store, I believe it is in Manhattan. The big three own many stores across the country. Ferrari, Porsche and Mercedes Benz a number of years ago had all planned on taking over the retail sale of their cars in the US so they could reap all the profits, it was only the threat of the many civil suits that slowed them down enough to discover on their own that the retail business is not all fun, games, and profits. In the big three's case it is more of a matter of business exigency. When a store owner is in bad shape they will often take the store over, operate it themselves and find a new owner rather than to surrender a good territory to the competition.

As to Ferrari's new place in NY, as I said they want out of the retail business but beside that most dealer contracts have an exclusive radius of operation in them and I would bet due to that they can't sell cars there.

 

Hmmm, I know lots of Boxster owners (being one), prowl the web sites quite a bit, and I know very few that consider their car garbage. As a matter of fact, most of them love their car, with not much less enthusiasm than is shown here for Ferrari's.

Perhaps you had a lemon? Even assuming there is a quality difference between Finland and Stuttgart, it would only affect the first few years production run until the workers had acquired the requisite experience, correct?

I have not heard of quality differences between the Euro and US cars before. Is there such a perception?

 

Well, my Honda was made in Ohio and it's never had a single repair in 75k miles and 10 years. Just routine maintainence. Oh, the timing belt change was only about $500 IIRC.

Ken

 

Truly there isn't much to think about all this, I am on your side and wouldn't want Ferrari to be anything else than what it is or stands for right now, many things are becoming to common so lets hope Ferrari stays true.

 

I stand corrected. A web search shows that Ferrari of Beverly Hills is company-owned also, at least it was at the time the article I read was written.

The whole history of the Ferrari of Los Gatos situation made for some interesting reading.

-Gio P

 

Hi Gio, would you happen to have a link to that Los Gatos story?

 

I hope that I had a lemon. Needless to say, my experience in the P-world wasn't so hot, despite the absolute BEAUTY of my vehicle.

You are correct WRT the first few years production run. After that, if all is equal in HR hiring standards the vehicle build should be extremely similar.

It's all learning curve.

Nick

 

Okay, let's put logic back into this. How much is it going to cost to build a new plant? Call it $100MM maybe more. Not uncommon to see automakers spending $250MM+ on green field sites. Seeing that this would be "Ferrari", most people would try and extract even more cash than usual for trying to do the deal.

Then we have the supply chain logistics. Not much NA content in Ferraris to begin with, so very little content will be sourced locally. Remember, the quantities of most of the subassemblies are very small production runs anyway (4000 cars per year is a single lot for most components). So everything will be shipped out of Europe (at various import duties which are different for different components). Very few NA suppliers will "tool up" for any of this, so no cost reduction there.

There are much better ways to hedge your margins based on currency fluctuations than building a new plant for what really is a "hobby" manufacturer.

The Boxsters that are made by Valmet in Finland (a company my dad was a VP at for several years) work from an economic standpoint because the labor is cheaper and the transportation issues and duties are basically a joke. It takes less time to ship parts from Germany to Finland than it does from NYC to LA. Remember, Europe "ain't that big". The volumes of cars that they are producing allows you to take advantage of economies of scale.

For those really paying attention to what is going on, remember, a skilled worker in Poland's cost is the same as a skilled worker in Shanghai. Don't forget that when you are trying to get in on a "good deal" investing in China. Expect to see more production in Eastern Europe over the next 10-15 years.

 

Another key point to remember is that the number isn't 4,000 units. Some number of units would still be produced in Italy and only the ones destined for the USA would be built here. So ten years' production might be 15000 units. If it cost $200 million to build the plan, the cost of the facility per unit coming off the line for the next 10 years would be over $13,000. And the increased cost of labor hasn't been factored in yet, as well the startup costs of having to "buy back" problem units, the training of the production line staff, the added corporate infrastructure, additional shipping expense for knocked down assemblies, etc, etc. etc.

 

ClassicFerrari-

This Los Gatos Times article is the first thing that popped up when I googled the relevant terms:

http://www.svcn.com/archives/lgwt/03.18.98/Ferrari.html

Cheers
Gio P

 

Thanks Gio! Happy Holidays.