No Fixed Abode: What's the Value of a Ferrari, Anyway?
Let’s get this straight: when it comes to what the used-car manager at the Ford dealership where I used to work called “pointy-nose cars”, I’m a Viper guy. No street car has ever captured my heart the way the Viper did once they let the thing have six hundred horsepower, a little bit of aero help, and a VVT-extended rev range. So when I found out the lineup for Road&Track‘s PCOTY 2014, my eyes went directly to the line on the sheet that said “Viper TA”. I stole extra time in the Viper, both on track and out in the Hocking Hills. I probably drove it twice as much as anybody else did, and if they’d let me drive it more, I’d have driven it more.
Not that anybody I know cared a single bit about that. To a man (and woman), they had one question: “What’s that 458 Speciale like?”
“Well,” I’d respond, “in the context of the Viper TA, which by the way was just discounted to an even more competitive pricing strat—”
“Is the Ferrari really loud? Is it really fast?”
“I’d say it was louder than the Viper, which has a sonorous bellow much like an angry delivery truck. Now, as far as lap times go, when comparing a manual-shift car like, say, the Dodge Viper—”
“SHUT UP ABOUT THE VIPER!” Okay, I get it. You want to discuss the Ferrari. Well, it’s no PCOTY spoiler for me to say that the Ferrari was simply brilliant. To begin with, it extracts 597 horsepower from just 4.5 liters, which I understand is a bit of a record among production automobiles. In this case, however, the numbers are meaningless, although all of them, from quarter-mile time to lateral grip, are world-class. What matters is that hideous strength, the nightmare scream of the engine, the carbon perfection of the interior, the approachability of the sky-high limits, the wasp-waisted menace of a design that is somehow feminine and masculine at once, the, um, I should really stop now before this turns into the eminently regrettable “Automobiles” section of Guitar Aficionado.
The point is that the 458 Speciale, just like the F12berlinetta I drove during PCOTY 2013, satisfies at every level. It offers exactly what you expect both for the price tag and from the marque. It is excellence without excuse or compromise. It is exactly what a Ferrari should be.
As opposed to what Ferraris used to be: awful.
When it comes to laying down a solid multi-decade run of sucking wind, not even post-rehab Aerosmith can compete with Ferrari. Between the last Daytona and the first 355 the company seemed utterly without direction. This is not to say that cars like the Berlinetta Boxers, the 328GTS, and even the Testarossa were without virtue — but they simply didn’t stand out from the field the way that their pricetags suggested they should, not even against their lackluster Seventies competition.
Fussy, delicate, chock-full of parts that were an embarrassment to the Fiats from which they were sourced, and worst of all slow. It wasn’t just the C4 Corvette, which developed a remarkable appetite for Maranello-sourced scalps. The 944 Turbo and even, occasionally, the infamous 5.0 Mustang could humiliate the V8 cars. When Mazda introduced the FD RX-7 it was sexier and faster than the 348 at a fraction of the price. Even the 360 Modena was really no more than an even match for the humble Corvette C5 Z06 — and with just the most modest of speed-shop tweaks the thermoplastic terror would drop a 360 around a road course the way (insert your favorite edgy analogy here).
As my future third wife Este Haim would say, those days are gone. Today, the 458 handles the C7 Corvette with an aloof, offhanded double-clutched drop and Pac-Man dance of LED shift lights across the chunky manettino-ed steering wheel. The F12berlinetta fears no wheeled vehicle; the V12 under the sculpted bonnet combines the caviar thrill of aural insanity and the hyperspace drive of a Star Destroyer. This is the Ferrari that Luca di Montezemolo made, the purveyor of perfected product at eye-watering cost, each one pursued by potential customers like a stainless-steel Rolex Daytona but made in quantities that match in a year what Rolex could make in two days.
That last part will change now. Sweater Sergio says that the number will now be ten thousand. Few products could increase production volume by more than forty
percent and retain every penny of their current market value. Marchionne says that he is afraid that customers will lose interest while they are waiting for their Ferrari.
He’s wrong, of course, because the brand’s customers have already shown themselves eager and willing to grovel at the feet of the dealers with the abject humility historically associated with nouveau shopkeepers of the eighteenth century trying to marry into respectable titles. Some dealers require that you already own a Ferrari in order to have one, a seeming Catch-22 that can be ably remedied by your capitulative purchase of an overpriced lot-lizard F430 Spider or, G-d help you, a 550 Maranello in need of a major service. Others simply double the price on the window and take bids above that. The F12berlinetta in particular sells for more used than its original MSRP. If you can come up with $450,000 in cold, hard cash, you should inquire about a pre-owned opportunity, because that’s all the Ferrari to which your minor fortune entitles you.
This undersupply situation hurts Ferrari’s image not at all and further entrenches Lamborghini et al as the white-label Armani to Ferrari’s Kiton. Yet it must annoy Sergio to see the dealers take so much of his money, and perhaps he hasn’t thought about all the lean years many of those dealers endured trying to push the F512M on people who happened to possess in a single body the individually-rare traits of stout wealth and legal blindness. An additional 3,000 units a year at a clear $100,000 profit is a third of a billion dollars, the kind of money that could be spent on a facelift for the 500L or something like that.
It would be quite pleasant to attribute Ferrari’s shift in fortunes to the monstrous improvement of its cars in the past decade. It would gratify everybody from the man on the street to the would-be Bob Lutzes of the world who could then hold up a picture of a Testarossa in one hand and the 599 Fiorano in the other and say, “See! Product wins at every level!” Everyone would go home happy at that point.
The more difficult truth is that it has never mattered much just how good Ferraris are. The shocking increase in price and popularity and waiting-list length is no different from the sudden shortage of “Score” baseball cards in 1988. When you have a massive influx of buyers into the market, it doesn’t matter what you’re selling. It only matters that you have a reputation for being a prestige product. If you don’t believe me, find somebody who is wearing one of those large-diameter watches emblazoned with the name of a long-dead Swiss watchmaker “rebooted” into acceptability through a fifty-million-dollar marketing budget.
As the “global economy” continues to mint new millionaires at nearly the rate at which it makes homeowners into renters and middle-class jobs into commodity labor, the demand for everything but the very best will shrink precipitously. We will be mercilessly winnowed by a system that prints endless money to skyrocket the value of existing capital. No Praetorian guard could enshrine the thousand-year-reign of the wealthy with quite this efficiency; no bloody rampage across burning cities could redistribute wealth with this kind of speed. Like lungfish gasping on a primeval shore, today’s upper-middle-class Corvette and Porsche buyers will evolve into Ferrari customers or wash back into the sea of Civic-steering proles. To those who attain the safety of wealth, nothing will satisfy quite like the prancing horse.
Seen in this light, then, Luca was shortsighted to curtail production as long as he did. At the same time, however, Sergio is equally wrong with his brash announcement of its increase. The thing to do would be to silently bump the numbers, allowing each dealer to make that six-figure-profitable call to just a few extra customers per quarter, maintaining the illusion of extreme shortage even as the distasteful fender shields make their appearance in front of more midnight raves and additional shareholders’ meetings. Perhaps an additional ten percent this year, and ten percent the year after that, without fanfare. This is how Rolex does it, of course; nobody even knows how many of the sacred Milgauss will leave the doors of the factory in 2014. All that matters is that you get yours.
For the newly minted Ferraristi, all the news is good. Today’s 458 or F12 or even FF (the California, as Felix Gallo once memorably suggested, should be tucked away like a mad, fretting aunt) is a brilliant, glorious, completely worthwhile automobile. We all know that the buyers don’t really care how good the cars are — but they are good, and that means something to all of us who love cars in all their forms. If your station in life allows you to consider the purchase of one, I cannot recommend that you stay your hand.
Unless, that is, I can interest you in a Viper.
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I was going to disagree with you, Jack, until that last paragraph. Yes, increase production and not tell anyone about that. That'd've been real genius. Keeping in the historical perspective, the image of the buyer humiliating himself at the dealer rings true. Reminded me of the German Holy Roman Emperor humiliating himself in the snow while the Pope stayed nice and warn in his Conossa castle in Ravenna. Thanks for the great article.
If I had Ferrary kind of money, I would have bought a hachiroku and a used Cirrus SR22 (new ones retail for $800k+ in 2014). I know a guy who has an R35 GT-R. In a year, he drove it out of the garage once, just to prove to me and other guys that he actually had it.