Ferrari Boss Steps Down As Marchionne Takes Control

by Derek Kreindler

September 10th, 2014 11:30 AM

ferrari boss steps down as marchionne takes control

Luca di Montezemolo, who has headed up Ferrari for over two decades and presided over record profits, has stepped down amid in-fighting with Fiat head Sergio Marchionne.

After joining Ferrari in the early 1990’s, di Montezemolo led a campaign to revitalize Ferrari, bringing in a lineup of vastly improved products and putting their Formula 1 team back on the road to success. Under his stewardship, Ferrari dominated the latter half of the 1990’s and early 2000’s, with Michael Schumacher, Ross Brawn, Rory Byrne and other motorsports all-stars working as one of the most dominant Formula 1 outfits in history.

In addition to their on-track success, Ferrari also found great financial success in the now ubiquitous merchandise licensing deals that were spearheaded by di Montezemolo, which has allowed Ferrari to maintain a lucrative revenue stream despite capping production of the cars at 7,000 units annually.

But that wasn’t enough for Marchionne, who publicly criticized di Montezemolo’s performance in Formula 1 this past week. Speculation is rife that Marchionne wants to expand Ferrari’s production volumes to help it compete with Lamborghini, which many fear would dilute the brand’s exclusivity.

On the other hand, the departure of di Montezemolo, who is credited with introducing milestone vehicles like the 355 (which replaced the dreadful 348), is being seen as a turning point in the brand’s history. Marchionne has never had experience running any premium brands, and Ferrari is one of FCA’s few profit centers. But many fear that this delicate balance will be permanently disrupted.

#Fca #Ferrari #Fiat #LucaDiMontezemolo #Sales #SergioMarchionne

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9 of 45 comments

1998redwagon on Sep 11, 2014

sounds like 2 boys got into a pissing match and the boss won. hardly a surprise but still newsworthy for those who follow the prancing horse.

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VenomV12 on Sep 11, 2014

I don't know a single person that owns a Ferrari that cares about F1 racing or how Ferrari does in it. I could not imagine someone lusting their whole life and working for years to own a Ferrari to all of a sudden change their mind because it was not the best in F1 racing either. If you make any kind of huge money, whether it be lottery, pro-athlete, CEO, whatever, your go to first big purchase will likely be a Ferrari or Lamborghini, even before a big house.

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- Jacob on Sep 11, 2014
  
  I think you do not realize that Ferrari's F1 team exists to make money, a lot of it, rather than simply to promote Ferrari's road cars. Companies like Mercedes started racing in F1 in order to promote their road cars, but for Ferrari it was the reverse. Ferrari started as a successful Formula 1 and sports cars racing factory and team, and only after having established itself as a successful Formula 1 team they started selling road cars. And in fact, originally the reason to sell road cars was not to make money, but to sponsor the racing operation. Even today Ferrari makes a profit off its racing in F1 rather than simply treating F1 as some kind of money losing marketing tool to promote its road cars.
  
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- IHateCars on Sep 11, 2014
  
  @Jacob That and selling keychains, T-shirts and hats! ;)
  
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TW5 on Sep 11, 2014

I have highest regards for Marchionne, but this will be his Waterloo. You don't mess with one of the world's most recognizable brands over an ego conflict with di Montezemolo.

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- Highdesertcat on Sep 11, 2014
  
  I do not believe Sergio is messing with the brand. I believe Sergio will take the brand further, faster. Anyone who has ever studied Sergio Marchionne, the man, would realize that this guy does nothing without ponderous forethought and tedious prior planning. If you can, watch some of the videos featuring Sergio conducting tours of Fiatsler facilities for auto journalists after the bailouts, and taking questions, offering off-the-cuff answers. This guy knows his stuff and it got me to spring for a 2012 Grand Cherokee.
  
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- TW5 on Sep 11, 2014
  
  @highdesertcat Marchionne's fastidiousness is the primary reason I respect him; however, his strategic vision appears to be non-existent. He's not the first executive to ride the wave of brand dilution to the top, but he doesn't appear to have anything else to offer. Dilute Jeep until it is debauched offroading kitsch. Dilute Maserati, which makes sense, to be fair. Dilute Ferrari because you covet Porsche's income statement. If he does dilute the Ferrari vehicle lineup, he will be seen as a one trick pony. As another poster opined, Peter de Lorenzo will be proven correct. Marchionne has nothing to add in an executive capacity. He is just another operations manager who counts beans and destroys brands.
  
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- Highdesertcat on Sep 11, 2014
  
  TW5, you could very well be right. This is such a dynamic and ever-changing business, especially when it comes to the specialty brands like Ferrari, Porsche and other exotics well out my reach. I am not qualified to forecast future demand or profitability. But I do see this as a consolidation of power for Sergio. He's done pretty good so far, but there is always the possibility that he will stumble because of a misinterpretation of the facts available to him, or changes in demand in the market. But because of Sergio's track record so far, I am willing to give him the benefit of the doubt. If he succeeds and attains the goals he set, he will be hailed as a hero, even by his detractors. If he fails, a lot of people will jump up and say, "Aha! I told you so!"
  
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Bobman on Sep 11, 2014

As much as I find the current CEO of Ferrari 'molto simpatico', the 2018 deliverables are 100% Sergio's responsibility. The utilization of resources are an important key to achieving those goals. I can't think of a more appropriate person than Sergio to spearhead the project. I believe he'll take Ferrari to heights never imagined and will do it without diluting the brand's prestigious reputation. Best of luck Sergio. Luca, wish you all the best and hope you may be able to work some magic for Alitalia.

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