Quote:
Raz (NC) said:
Obviously, as you know, I am a fan of Ferrari as well. I played the dealer games with the 360 and now I await my F430, at MSRP, late next year. While I do appreciate that the F430 will hold its value better than any Porsche, by no means do I want Porsche to start acting like Ferrari. In fact, I would be far happier if Ferrari started acting like Porsche in this sense. If I could get any Ferrari, at any time, at realistic prices, I would be far happier. Sure, resale values wouldn't be as good, but I know I don't buy these things for resale value, I buy them to drive. And in my opinion, I'm all for anything that lets more people drive these things and truly enjoy them.



I think Ferrari will sooner have to review its current strategy of restricting the production to 4300 or something cars per year and for the following reason.

Fiat Group short time objectives is to increase its gross margin which is still negative today. If I am not mistaken, the objective of Sergio Marchionne (CEO of Fiat Group who I know well) is to have a +4% gross margin at the end of 2006 and Ferrari will be asked to contribute to a better margin for the Fiat Group at large.

The question is how Ferrari can contribute to this ambitious exercise ?

On Ferrari's side, the costs of the F1 activity are still increasing (as an example, the development of the new V8 engine for the next F1 season will cost some additional 25 mio. Euros) and are not compensated by the sales of street cars since years now. The deficit was mainly financed through sponsors and a famous cigarette maker in particular, but the restrictive EU legislation in that area imposes Ferrari to find new source of revenues.

Today, Ferrari has already find some new and lucrative sources of revenue. In particular, the merchandising activities have expanded and are now bringing a lot of money to the company. The problem is that this works until Ferrari is winning and Michael Schumacher wins and stays the star he is today.

Ferrari has also created "derived products" to generate additional revenue flows. These derived products are from my point of view a sign that the company is currently changing its policy to limit the number of street cars produced. The current two examples of high added value derived products developed by Ferrari are the Maserati MC12 and the FXX. You (Nick and Stradale in particular...) will remember that in another post, I qualified the FXX of being a kind of swindle. This was certainly a bit provocative but I was in fact thinking to Enzo's customers ! Indeed, selling the FXX or the MC12 which are just another Enzo is not very fair towards those Enzo customers who were told that their car would be so exclusive that only 400 would be built.

So for all that reasons, in a very near future, I think Ferrari will have to increase its production levels, probably develop entry level models or reduce prices, in order to make volume and increase its profitability. In other words, Ferrari will soon start acting like Porsche