What's Working at Ferrari: Profit Rises Along With Demand
Thanks to the increasing wealth of the world’s elite, supercars have remained in fashion. Ferrari profits surged upward in the first quarter of 2017 as the Italian automaker continued a scheme designed to gradually accelerate volume.
The brand’s net income over the first three months of 2017 climbed to 124 million euros ($135 million) from 78 million euros during same period last year. Meanwhile, overall revenue increased 22 percent to €821 million, helped largely by engine sales to Fiat Chrysler’s Maserati — the car you buy when you wanted a Ferrari, but fell just shy of being able to afford one.
Likewise, Ferrari NV stock prices rose dramatically on May 4th after climbing steadily since the company’s split with FCA. High-end luxury and sporting automobiles have proved exceedingly popular over the last two years, but demand for the 812 Superfast and grotesquely expensive LaFerrari Aperta convertible are practically unparalleled. However, rival Porsche is doing rather nicely, especially when it comes to sales.
By contrast, Lamborghini and Aston Martin are about on par with last year’s sales. Which proves that it isn’t a bad idea to shake things up once in a while. Both Ferrari and Porsche are branching out into new territory without abandoning their core identities, and it seems to be working well.
According to Bloomberg, CEO Sergio Marchionne plans to continue evolving the brand, expanding the lineup to draw a wider range of customers. At present, Ferrari is considering more-affordable models equipped with a V6 engine and has practically guaranteed hybrid powertrains in the company’s future. V12 engines proved to be the winning recipe for prancing horse sales, however. Models using the company’s biggest motors went up 50 percent in the first quarter, but even Ferraris equipped with less desirable engines still sold out immediately.
[Image: Ferrari]
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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"Ferrari...branching out into new territory without abandoning their core identities" Automatic-only
What a small income for such a big name! I mean, Ferrari is as famous as Coca Cola. There must be a way to dramatically increase their revenue and profit.