By on July 8, 2015

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With the imminent spin-off of Ferrari, Fiat Chrysler Automobiles boss Sergio Marchionne may be looking for a cash cow to help keep lagging brands at FCA afloat.

A story by Automotive News on Wednesday wonders aloud if Maserati will replace Ferrari as FCA’s marquee brand with double-digit profit margins. Behind Marchionne’s plan to sell the world on Jeep and Alfa Romeo, he would need to sell the world on the idea that Maserati is an exclusive, luxury brand, the article says.

Of course, that may be tough to do considering Maserati has always had a reputation for being Ferrari’s nerdy suburban cousin.

At issue isn’t the Trident brand’s identity, but rather its bottom line. When Ferrari leaves the FCA family later this year, it’ll likely be taking some debt but also a lot of cash. Ferrari turns a profit each year, upwards of $500 million, for parent-company FCA. Money like that is hard to replace.

Maserati comes close, according to the story. Despite starting at $69,800 for an entry Ghibli, Maserati manages 10 percent margin on its cars compared to Ferrari’s 13 percent. Maserati’s volume production is also roughly 6 times that of Ferrari’s, but refining Maserati’s image from famously fussy to drop-dead desirable could be a tall task.

According to Autodata Corp., sales of the Ghibli have slid considerably since its introduction in 2013 and dealers have offered more than $9,500 in incentives for the mid-sized luxury car.

Still, Maserati is boosting its dealership presence in the U.S. by around 20 percent this year to 125 dealers and their luxury Levante SUV should be unveiled at Detroit’s North American International Auto Show.

“They’ve got a hell of a lot to build on,” Joe Phillippi, president of AutoTrends Inc., a consulting firm in Andover, N.J., told Automotive News. “But it’s incredibly expensive to play the game. Marchionne can’t afford to stumble. With the volume numbers he’s trying to generate, he’d better not miss.”

Maserati has grown considerably in the U.S. thanks to a larger portfolio and growing dealership network.

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36 Comments on “Can Maserati Replace Ferrari? (Or at Least Ferrari’s Profits)...”


  • avatar
    Pch101

    The guy who wrote the story for Bloomberg doesn’t grasp what is going on here.

    Ferrari should be worth more as an independent than as a subsidiary. Most of the shares will be held by FCA, the Agnelli fund, or whatever. That 90% interest that the mothership retains will be worth more than the 100% interest is worth today.

    Presumably, the FCA relationship with Ferrari include some sort of arrangement in which Ferrari will pay for services, real estate leasing, parts, or whatever. So now FCA will have created an opportunity to book a portion of those revenues as profit.

    There is no need for Maserati to replace Ferrari per se. The company does need to improve its margins, but that would be true with or without Ferrari.

  • avatar
    CJinSD

    “Of course, that may be tough to do considering Maserati has always had a reputation for being Ferrari’s nerdy suburban cousin.”

    Always? The Maserati brothers started putting their own name on the cars they built in 1926, twenty years before Enzo Ferrari put his name on a car. The Maserati 250F was one of the most successful F1 cars of all time and their 450S sports car made Ferraris of the era seem tame. Even Gianni Agnelli took a 5000GT over a Ferrari at one point.

    • 0 avatar
      Aaron Cole

      Point taken. Although the 1980s were nothing to write home to the folks about for Maserati.

      • 0 avatar
        CoreyDL

        I’ll have you know the TC was superb, as was the Merak filled with Citroen bits. And the Bi-Turbo? Try and pass it on the highway (without getting your lungs filled with smoke)!

        /s

        • 0 avatar
          craiger

          “And the Bi-Turbo? Try and pass it on the highway (without getting your lungs filled with smoke)”

          Easy to do, since it likely wouldn’t be running.

    • 0 avatar
      ajla

      So Maserati is the Italian Cadillac?

      • 0 avatar
        28-Cars-Later

        Maserati would have to fail first before you can make that analogy.

        • 0 avatar
          CJinSD

          Maserati was part of Citroen when Citroen went bankrupt during the mid-’70s. Citroen tried to liquidate Maserati in 1975, but Maserati was saved by the Italian government and filtered into an Argentinian industrialist’s hands.

          • 0 avatar
            28-Cars-Later

            Interesting facts, thanks for sharing.

          • 0 avatar
            Eyeflyistheeye

            Argentinian industrialist?

            Please, if you’re going to refer to Alejandro de Tomaso, at least give him the dignity of using his name.

            Soichiro Honda said “success is a thousand failures” and learned to curb his unusual flights of engineering for mainstream success. However, Alejandro delivered a thousand failures and counted them as successes, giving the world the Maserati Biturbo, the Qvale Mangusta along with the infamous Pantera. However, he left a lasting skid mark on the underpants of the exotic car world that not even Persil could get out.

            He should be the patron saint of TTAC. San Alejandro de Tomaso.

        • 0 avatar
          Ihatejalops

          Why? A few companies have failed at Maserati. It’s amazing to me how people have hard time branding them and selling them. It’s not too difficult. But ah well, it will remain a niche forever.

    • 0 avatar
      sportyaccordy

      Do you think the average Maserati or Ferrari customer knows any of this?

      No

      They know price tags, Italian names, and what their neighbors drive.

      • 0 avatar
        CJinSD

        The average customer doesn’t even know how to drive, but that doesn’t change the concept that words have definitions that should be respected.

  • avatar
    Speed3

    Ferrari will still be part of the Fiat family, and I expect there to still be a lot of collaboration.

    Obviously Maserati will never be Ferrari (didn’t Jack Baruth say every Maserati produced ever is crap?). However, assuming Maserati can get to Marchionne’s goal of 50K annual sales, that should more than make up for the lost profits from 7k Ferraris.

    However, Porsche was just shy of selling 190K units in 2014. If Maserati builds out its portfolio with comparable vehicles there is no reason to think it can’t sell at a third the rate.

  • avatar
    Felix Hoenikker

    This is rich.
    I was more than a little bemused a few weeks ago when I noticed the presence of a Maserati dealer in Allentown, PA. It is located in the rarefied retail space across the street from a Kmart and adjacent to Ollie’s liquidation store. Motto “Good stuff cheap”.
    I think they got the property for the Maserati cheap when the Land Rover/Jag dealer moved out. Ollie’s pricing is to discount 50-60% off retail. Following the pricing formula of their next door neighbor, the $70K Maserati would sell for about $30K. That would bring it into my cheapass price range.

    • 0 avatar
      Tosh

      Obviously the author is one generation removed from myself. Just wait until these pigs are 4-5 years old, and you too can have one cheap. Which is exactly what happened 25 years ago when any dousch with a job could have a low mileage BiTurbo for under $10k. There’s nothing new under the sun…

  • avatar
    CoreyDL

    While Maserati certainly has a better brand name in the US than Alfa, I think neither is very viable at this point (for anything past niche volume), and with FCA’s resources. Yes Maserati has sold more cars here, and had a relatively continual presence while Alfa faded out. But the cars weren’t especially good.

    And even through the late 00’s, look at the data on the Quattroporte. Expensive and fragile! I love the GranTurismo, but it’s too big, expensive, fragile, and floppy for the elite car buyer.

    I’ll tell you one thing though, that MC12 is a hell of a looker in person. I spent more time around that thing at a concours show than most the other cars there. Couldn’t stop looking at it from all angles.

    • 0 avatar
      energetik9

      I can’t really disagree. It will take years for Alfa and Maserati to really establish any foothold and capital.

      I will say that Maserati and Alfa (in my own opinion) are unmatched is pure style. I briefly considered a Gran Tourismo just becuase I loved the looks and especially that exhaust note. A beautiful car.

  • avatar
    sportyaccordy

    Ghibli is supposed to make volume but it’s got mega teething issues to sort out. I think this segment is short on style FCA’s luxury entrants deliver, but aside from style and really good sounding engines I don’t know what else Alfa/Maserati can bring to the table that will peel anyone away from a $349 328i lease special.

  • avatar
    Rday

    Marchionne is a real con man, after all he proved that GM is/was run by complete idiots/greedy bastards. AND forced GM to give him several $billions to make him just go away and not honor the agreements for GM to buy Fiat.
    Admire him for his balls but i don’t think anyone in their right minds wants to deal with him or his company.

  • avatar
    vent-L-8

    Jeep and Ram are the only cash cows keeping the rest of the enterprise afloat

  • avatar
    Greg Locock

    Since when is selling 10% of the shares and keeping 90% a spin-off?

  • avatar
    pgcooldad

    FCA currently owns 90 percent of Ferrari. Piero Ferrari, son of Enzo Ferrari, the company’s founder, owns 10 percent and plans to keep his holding.

    Only 10% of the shares are being offered on the IPO, the remainder will be absorbed by FCA.

    • 0 avatar
      HerrKaLeun

      you’r right. the article is wrong

      “Ferrari turns a profit each year, upwards of $500 million, for parent-company FCA. Money like that is hard to replace.”

      With Fiat currently owning 90%, $450 million of that profit goes to FCA. If they sell 10% (keep 80% at FCA), they still have $400 million of that profit.

  • avatar
    George B

    Maybe Maserati needs more exotic doors.

    [ https://www.youtube.com/watch?v=IJIAOosI6js ]

  • avatar
    PriusV16

    Wow, tough crowd here.

    Over here in Germany, Maserati appears to be doing quite well in terms of sales numbers, and much so because of the (relatively) new Ghibli….. which happens to be one of the most beautiful cars on the road out there, IMHO.

    I’ve never sat in one or even driven one, but if I had the funds to afford it, I’d get one just to avoid driving one of the Audis/BMWs/MBs that are truly ubiquitous over here.

  • avatar
    CincyDavid

    My local Volvo dealer is also a Porsche & Maserati store. When I go in there to buy parts for my old Volvos, I get looked at like I crawled out from under a rock…pompous asses.

    I don’t see Ferrari and Maserati as being in the same part of the market, I see Maserati as more of a grand touring car, with a mix of sedans, while Ferrari is more of a true sports car. The moves FCA is making, and trying to make, could play out really well, or could be a complete debacle…it will be interesting to see.

    • 0 avatar
      CoreyDL

      Aww Porsche of the Village. Do you live in Mariemont!?

      • 0 avatar
        CincyDavid

        Nope, West Sider…Monfort Heights/White Oak area off I-74.

        I have had much better luck with Gary, the parts manager at the Volvo store in West Chester…more knowledgeable and a hell of a lot friendlier.

        • 0 avatar
          CoreyDL

          Ahh, I thought you had “left” after living there growing up. The West Side pull is just too strong!

          But I bet you enjoy reminiscing about which Catholic boys high school you went to!

          West Chester people have too many children, and are always in my way on 75. I also see them at Kroger. They are all blonde.

  • avatar
    CincyDavid

    I don’t “bleed purple” like all of the Elder HS guys, we are a St Xavier Bomber household. My dad bitched a blue streak when tuition was $1500 my senior year, in the 80s. Our senior will be costing us nearly $15K next year…it’ll be cheaper when he goes to college.

    • 0 avatar
      CoreyDL

      Good grief, I had no idea they were that expensive! I’m from the Indiana side originally, so when people ask me where I went to school, I say Hanover. Then they say “Oh, is that off of Harrison?” I’m like NOOOOO.

  • avatar
    CincyDavid

    Hahaha, Cincinnati can be a smidge provincial. Shoot, I could pay cash for a Maserati with the money I’ve spent on Catholic education. And a Porsche too…


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