No, there are issues with their margins compared to true luxury brands. If you read the financial columns, there is a huge debate as to how to value Ferrari after the spin off, they want to be valued like LVMH, but while their gross margins are good, they're not 300% good.
A good chunk of VW's profit now comes from Bentley, Rolls Royce has a significant impact on BMW's profits. And don't believe for a second they aren't advertising. At this level, it's all events based marketing, not mass media. The advertising spend is still there, it's just so targeted that most don't see it. Almost all luxury companies bar the ones that are going after mass affluent market segments are going down this route. UHNWIs are not reading People Magazine.
Ferrari is still a very conservative company, they got burned on the 308 GT4 and the Testarossa building more cars than the market could handle at the time, they're smart to only build what has been sold, this is supply chain management 101.
But you nailed the comment about the American consumer...
Erik
Sent from my iPad
Ferrari is the brand I know of that can sell every car they make without advertising Truly an amazing feat if you ask me Marketing at its best
And selling the product at margins unheard of in the retail sector Other than the few speciality cars the used market is the same as other cars if you know how to shop But can you imagine if Chevy or Ford could pull this off ? And have you been following the Chrysler debacle with the Charger? Dealers charging are you ready for this 60K over sticker for the shit box Charger with 707 hp ! My god how stupid is the American car buyer In victory you deserve Champagne In defeat you need it!
Scars are Tattoos with better stories !
If you follow all the rules You miss all the fun!
If you have no enemies, you have no character !
Clyde Romero 678 6419932
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It's worked well for them for many years now (limiting production). But, back when the F40 was released, they said they would only build 350 (I think that was the number), but so many people were tripping over themselves to get one and Ferrari kept building them to eventually build more than 1300. Going over production nearly four times certainly didn't diminish future resale values on F40s. Correct me if I'm wrong, but I don't think they ever sold for less than list price at any time in their history (excluding rebuilt wrecked cars). Would regular production car's resale values be affected that much if they did go over 8000 cars a year? 9000? 10000? Production life cycle numbers for recent models have exceeded five figures quite easily. I've noticed inventory at FMoV seems to turn over reasonably quickly (although this is an affluent market). They've launched into many new markets now, I think they each can absorb all that Ferrari can produce and then some. Peter
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