FCA Spinning Ferrari Off From Parent Company By 2015

by Cameron Aubernon

Published: October 29th, 2014

fca spinning ferrari off from parent company by 2015

By this time next year, Ferrari will no longer be a part of Fiat Chrysler Automobiles, thanks to a plan announced today that will spin the exotic brand off from the rest of the Italo-American automaker.

Bloomberg reports FCA will sell 10 percent of its stake to the public, giving the remaining 90 percent to the automaker’s own shareholders. The shares will be listed in the United States stock market, with Europe possibly receiving some of those shares, as well.

According to Morningstar analyst Richard Hilgert, the split “unlocks the value” in the Ferrari brand, which could be worth as much as $7.4 billion. He adds that the move helps pull Ferrari out of the shadow of FCA, citing “the street’s perception of low profitability to no profitability” regarding the automaker’s market performance.

Speaking of performance, FCA stock climbed to $11.56 Wednesday after opening at $11.31, falling to $10.85 at the closing bell. Ferrari stock, meanwhile, would go for $5.90/share for FCA shareholders.

#2015 #Divestitures #Ferrari #FiatChryslerAutomobiles #StockMarket

Cameron Aubernon

Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.

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12 of 34 comments

Deanst on Oct 29, 2014

What FCA needs is a merger with a firm who knows quality and how to build a decent car - is Mazda busy?

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- Iamwho2k on Oct 29, 2014
  
  My first reaction is No, Hell No! But, assuming Mazda can keep an arm's-length distance from Marchionne, FCA could use Mazda's platforms for Alfa. Fiat is getting a version of the new Miata; the Mazda 3 might make for a nice, small Alfa, the 6 for a nice, mid-sized Alfa and the CX-5 for the CUV that every automaker seems to need. In turn, Mazda gets the volume it needs to survive in the future.
  
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- Lorenzo on Oct 29, 2014
  
  @James2 The problem is, Marchionne plans on staying another five years. He's also set up FCA management so everybody answers to him. Once he's gone, there's no chain of command to fall back on. Unless you've studied management organization, you have no idea how many pitfalls are built into a change of leadership with that structure. Waiting five years might not be a good idea either - he could spin off Chrysler and Dodge, moving the minvans to Ram, spin off Maserati too, make Alfa the low volume premium car in Europe, and put Lancia out of its misery. Then he'll have global Fiat and Jeep, and Ram and Jeep in North America as a cash cow. FCA becomes FJR, with the low profit NA cars eliminated.
  
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- LectroByte on Oct 30, 2014
  
  Not sure that Mazda would bring anything to the table that FCA doesn't already have, except maybe a Miata, such as it is. Mazada=warmed-over-Ford (badge job) from what we in East TN can see, and no heterosexual (in East TN that means everybody) I know would ever consider a Miata, much less a Fiat 500, assuming there was a dealer of such things within 200 miles of Bristol-by-God TN. Praise Jesus!
  
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- Petezeiss on Oct 30, 2014
  
  @Lorenzo "Once he’s gone, there’s no chain of command to fall back on." Wait till his subordinates learn how a papal conclave works. Cancel those vacation plans. The Interregnum of 2019-?
  
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- Redav on Oct 30, 2014
  
  @James2 Even in such a scenario, don't expect to see Mazda platforms used in Alfas. Marchionne wants Alfas to be Italian, so they won't increase Mazda's volume except maybe as profit though licensing fees, which won't happen if they merge/are bought. As for quality, so much of it is about controls, culture, attitude, priorities, etc. If FCA has low quality, then it's because they are doing things (design, manufacture, assembly, inspection, etc.) that cause quality to be low. It's unreasonable to think that a small addition could change a larger company's inertia.
  
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- Morea on Oct 30, 2014
  
  @redav "Even in such a scenario, don’t expect to see Mazda platforms used in Alfas." Mazda's are also FWD except for the Miata. FCA has announced that all future Alfas will be RWD.
  
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TonyJZX on Oct 29, 2014

Ferrari is a marketing company that seeks to license their name to Microsoft, Sony, Mattel, Panerai, Acer and whoever else will pay... they also run a F1 team on side and sell the 7000 six to seven figure supercars to the 1%

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NightA4 on Oct 30, 2014

Wonder if Maserati should go with Ferrari. Definitely fits better there, than with the Dodges and Jeeps

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- Chan on Oct 30, 2014
  
  They're going to need to continue Maserati powertrain R&D with Ferrari, since Fiat doesn't have any in-house V8 designs. I don't think a MultiAir-powered Ghibli would sell.
  
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- Fred on Oct 30, 2014
  
  @Chan If the old Chrysler TC is any indication you're probably right
  
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Morea on Oct 30, 2014

Here is a good write up describing how, despite this announcement, things are not expected to change at Ferrari: http://jalopnik.com/who-will-control-ferrari-now-1652197657

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