Do Ferrari need to increase production?
Poll: Do Ferrari need to increase production?
Total Members Polled: 56
Discussion
Just wanted to start some debate on this. Firstly, unfortunately i'm in no position to order a new Ferrari.
Every new model that they launch now (not including specials in this, TDF, etc.) is already sold out for at least 18 months, 2 years and in the case of the new 812, there is talk that the entire production run for the UK is sold. I love the exclusivity of the brand but with more and more people in a position to buy a new Ferrari now, it does seem a shame that it is so difficult to order one. This can't be a problem solely in the UK either? I'm not thinking of Porsche or Bentley numbers but surely Ferrari must be conscious that the market now is so strong they could increase production/UK allocation without having a detrimental effect on the brand or the second hand value of its cars?
Every new model that they launch now (not including specials in this, TDF, etc.) is already sold out for at least 18 months, 2 years and in the case of the new 812, there is talk that the entire production run for the UK is sold. I love the exclusivity of the brand but with more and more people in a position to buy a new Ferrari now, it does seem a shame that it is so difficult to order one. This can't be a problem solely in the UK either? I'm not thinking of Porsche or Bentley numbers but surely Ferrari must be conscious that the market now is so strong they could increase production/UK allocation without having a detrimental effect on the brand or the second hand value of its cars?
Production is creeping up by a few hundred each year (currently about 8500) but I believe is constrained to 10 000 to comply with some EU regulation which I think counts them as a small manufacturer with easier pollution and/or safety testing
The challenge will be the model split once the SUV comes along and in particular if the Lusso still fits
The challenge will be the model split once the SUV comes along and in particular if the Lusso still fits
Easier said than done and they carefully control numbers to protect the brand.
Far easier to overprice the lower volume and keep demand high for similar overall revenue than incur additional plant costs and then have over supply resulting in lower prices and further damaging residuals.
McLaren are still low volume comparatively speaking so need a minimum volume to cover the overheads regardless of demand which is their issue whilst still trying to grow
Far easier to overprice the lower volume and keep demand high for similar overall revenue than incur additional plant costs and then have over supply resulting in lower prices and further damaging residuals.
McLaren are still low volume comparatively speaking so need a minimum volume to cover the overheads regardless of demand which is their issue whilst still trying to grow
RamboLambo said:
Easier said than done and they carefully control numbers to protect the brand.
Far easier to overprice the lower volume and keep demand high for similar overall revenue than incur additional plant costs and then have over supply resulting in lower prices and further damaging residuals.
This is basically it.Far easier to overprice the lower volume and keep demand high for similar overall revenue than incur additional plant costs and then have over supply resulting in lower prices and further damaging residuals.
It might seem a bit unscientific but when it comes to these marques - production is very precisely gauged.
It seems counter-intuitive in general supply & demand terms, but there is a value to there being relative scarcity of the product. Bear in mind that the profit margin on each vehicle (and particularly options) is considerable, unlike other marques it has very little to do with the cost of the components. Ferrari and co sell enough to satisfy their shareholders, and no more. Demand is worth more to them than manufacturing extra cars.
"Always leave them wanting more" ~ P.T. Barnum
Everone understands the statements above, about brand protection and supply and demand, but I don't think that the OP is really referring to this.
Clearly, there is now a massive gulf between what they produce and what they could sell. To the point that you have to get invited to buy the special editions, and have to comit to buying sight unseen way in advance.
Even the statement about satisfying the shareholders doesn't really apply, as they could be receiving far more value for their shares if production was upped, without harming the brand.
It really shows how polarised the market place at this level is. They don't even have to try to market cars.
Nice problem for a company to have. There was a time that a bad car, a turkey, could ruin them. But not anymore.
does Ferrari really actually make significant profit from car manufacturer, or does all the real profit come from the billions in merchandising? I'd love to know.
Clearly, there is now a massive gulf between what they produce and what they could sell. To the point that you have to get invited to buy the special editions, and have to comit to buying sight unseen way in advance.
Even the statement about satisfying the shareholders doesn't really apply, as they could be receiving far more value for their shares if production was upped, without harming the brand.
It really shows how polarised the market place at this level is. They don't even have to try to market cars.
Nice problem for a company to have. There was a time that a bad car, a turkey, could ruin them. But not anymore.
does Ferrari really actually make significant profit from car manufacturer, or does all the real profit come from the billions in merchandising? I'd love to know.
TTmonkey said:
1. There is now a massive gulf between what they produce and what they could sell. To the point that you have to get invited to buy the special editions, and have to comit to buying sight unseen way in advance.
2. They don't even have to try to market cars.
3. There was a time that a bad car, a turkey, could ruin them. But not anymore.
2. Actually Ferrari invests heavily in marketing, including their extensive use of CRM (eg introducing 7 Years Free Servicing not for customer benefit only but to harvest huge amounts of valuable customer usage data). Ferrari has 6.5 million followers on Instagram (main account). They just don't need to spend on paid-for advertising.
3. If Ferrari produced a turkey, it would harm them immediately, such is the intensity of competitive options.
Outside of cities like London seeing a Ferrari is still pretty special and actually makes me quite happy every time. I think a substantial increase in production would ultimately harm the brand and the perception of value people get from a Ferrari (over and above that they do produce pretty special/good cars). perceived exclusivity (often due to rarity) is - nowadays more than ever - a selling point.
I'm not suggesting Ferrari make a massive increase in production, but hearing stories that the stock V12 GT is completely sold out just seems odd. If this becomes the case for every model can you see the day Ferrari UK start making customers sign a contract stating the owner can't sell the car on for 2 years, similar to Ford and the GT?
I remember been at my local dealership when the 430 Scuderia came out and been told by the dealer that they still had plenty of build slots available if interested. Long gone are those days!!
I remember been at my local dealership when the 430 Scuderia came out and been told by the dealer that they still had plenty of build slots available if interested. Long gone are those days!!
W111AAM said:
I remember been at my local dealership when the 430 Scuderia came out and been told by the dealer that they still had plenty of build slots available if interested. Long gone are those days!!
TBF thats because it was 2008 and lots of customers simply walked away from their deposits because every asset was falling in value. If you remember at the time the cars quickly fell in value because the dealers were stuck with cancelled orders traxx said:
W111AAM said:
I remember been at my local dealership when the 430 Scuderia came out and been told by the dealer that they still had plenty of build slots available if interested. Long gone are those days!!
TBF thats because it was 2008 and lots of customers simply walked away from their deposits because every asset was falling in value. If you remember at the time the cars quickly fell in value because the dealers were stuck with cancelled orders TTmonkey said:
does Ferrari really actually make significant profit from car manufacturer, or does all the real profit come from the billions in merchandising? I'd love to know.
Most margin comes from financing. Brand licenses pull in easy money, but I don't think it beats financing.I suppose what I'm trying to get at in a very round about way is that proportionally there are/must be more people out there that want a Ferrari than there were 10 years ago and it doesn't appear (in my opinion) that Ferrari have increased production to meet this. Not that they have to of course!!
Out of interest how many cars do Aston Martin/Bentley/Lamborghini produce a year
Out of interest how many cars do Aston Martin/Bentley/Lamborghini produce a year
W111AAM said:
I suppose what I'm trying to get at in a very round about way is that proportionally there are/must be more people out there that want a Ferrari than there were 10 years ago and it doesn't appear (in my opinion) that Ferrari have increased production to meet this. Not that they have to of course!!
Out of interest how many cars do Aston Martin/Bentley/Lamborghini produce a year
There is also quite likely a difference in the perceived availability as a layman, what you're told the availability is when you're inside the dealership, and what it actually is after you've put your money down - i.e. where "an allocation has become available", or you option your car up to the nines, etc. Out of interest how many cars do Aston Martin/Bentley/Lamborghini produce a year
On the outside looking in it is in Ferrari's best interests to make it appear that the product is very exclusive and not something anyone can just walk in and buy, even if they have the means.
The Surveyor said:
Wasn't Enzo's philosophy to always build one less car than the market demands?
Yes, exactly that.Edited by Durzel on Friday 16th February 13:07
Behemoth said:
TTmonkey said:
does Ferrari really actually make significant profit from car manufacturer, or does all the real profit come from the billions in merchandising? I'd love to know.
Most margin comes from financing. Brand licenses pull in easy money, but I don't think it beats financing.Gassing Station | Supercar General | Top of Page | What's New | My Stuff