Ferrari Banks $437.7m Profit for '08
The rest of the automotive industry might be watching in horror As the World Downturns, but Ferrari had a bit of a giggle all the way to the bank last year. The FIAT division ended 2008 some $437.7m ahead, on sales of 6587 vehicles (up two percent). While sales in Ferrari’s biggest market (that’s US) remained flat, they swelled in Eastern European (+23 percent), China (+20 percent), the Middle East and South Africa (+12 percent). With the feds capping salaries, and austerity chic sweeping Spago’s (“I’ll just have the lettuce leaf”), it’s entirely possible that that Ferrari’s ’08 sales surge represents a dead cat bounce. And there’s a seguire il denaro story behind the story . . .
You know that Ferrari-branded Acer 1200 laptop Autoblog (and thus TTAC) featured on our hallowed web pages? Grande lire. Maranello’s licensing, retail and e-commerce efforts are up 28 percent. Online merchandise sales increased by a whopping 65 percent. And sales of dust collectors and other “I wish I could afford a car instead of this hugely overpriced umbrella” Ferrari-branded knick-knacks jumped 16 percent at Ferrari’s 25 retail outlets. Is that what they call a Ferrari dealership these days?
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Disregarding the knicknacks for a while, Ferrari actually have/had quite a cushion of dealer markups to fall through before demand drop start affecting the mother ship. Especially with the 430. I bet the dealers are not all fairing as well as previously. Anectdotally, it is currently a 'good' time to get a, relatively speaking, 'deal' on one.
The old man sold road cars to go racing, the Ferrari company now goes racing to sell Ferrari branded merchandise. Fila sells hundreds of millions of dollars worth of apparel alone. Rod Panhard's comparison to Harley Davidson is apt. Compared to the five figure cost of regular maintenance on a Ferrari, the expensive toys at a Ferrari retail store are cheap. The retail stores also allow Ferrari to sell the brand at a lower price point than $180,000. They can sell something to all the wannabe tifosi and if the goods are upscale enough, they haven't hurt the brand. Ferrari's already whored out their logo to plenty of licensees, so they don't have to make anything themselves to stock the stores. I'm pretty sure that it was Porsche and Porsche Design that first started marketing a car brand for non-automotive products. Now, merchandising is so important that Lamborghini held a fashion show for Lambo apparel at the NAIAS media preview last month. It may offend purists, but it's smart business. If you can only build a few thousand cars a year, and you have a brand that is recognized by billions around the globe, might as well try to capitalize on that brand's value.
Quote Ferrygeist: "Regarding Ferrari’s F1 budget, three years ago, a rep from BBS wheels who’d briefly worked in some indirect connection to their Ferrari sponsorship told me that the budget at that time was around $500 million. That’s a staggering sum of money to go racing. I’ve never been able to figure out how Ferrari could possibly afford that, but I guess it’s making a little more sense." The simple answer is...Sponsorship...Shell sponsorship alone pays most of their F1 bills.