Thursday 6th February 2020

Ferrari just getting started | PH Footnote

Maranello's latest results suggest it is on a roll. And there's still an SUV to come...

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With a record five new model launches in its twelve month span, including two on the same day, 2019 was a big year for Ferrari. Now, the pace of the company's efforts is being reflected in its results, which saw an increase in pre-tax earnings of 22 per cent in the final quarter of the year. Overall, the marque's net revenue increased from €3.4 billion to €3.8 billion (£2.9 billion to £3.2 billion), while its adjusted core profit for the year stood at just shy of €1.2 billion (£1 billion) representing a staggering profit margin of 33.7 per cent. By contrast, Porsche's margin stands at around half of that figure, while Aston Martin's lingers below seven per cent.

The improvement was partly due to an increase in shipments, which rose 9.5 per cent to 10,131 units, largely thanks to a 20 per cent increase in deliveries to China, Hong Kong and Taiwan. The company's free cash flow of €675 million, meanwhile, was heavily aided by the collection of deposits for its exclusive Monza SP1 and SP2 models.

While Ferrari's continued success may be unsurprising, the results are interesting for two reasons. Firstly, it throws the continued struggle of rival Aston Martin into even starker contrast, underscoring the British marque's missteps with thick Rosso Corsa lines. Much has already been said about the situation at Gaydon and, with Lawrence Stroll's recent investment there may well be light at the end of the tunnel, but the firm's attempt to go toe to toe with Maranello looks more hubristic by the day.

Secondly, it demonstrates that despite current market trends, SUVs are not - as they have been billed for so long - the vital lifeline to which all performance manufacturers must cling. Ferrari may be in a somewhat unique position when it comes to brand value and widespread appeal (how many other marques could support their own self-styled theme park?) but thanks to a strong line up of cohesive yet distinct models, a well-judged balance between supply and demand, a quality-over-quantity approach to limited-edition releases, and the success of its excellently run Corse Clienti and F1 Clienti programmes, its core business strategy remains second to none.

What's more, the solid foundation means that when Ferrari's Purosangue 'FUV' does arrive, the brand will not rely on its success for financial stability, and nor does it need the income to fund future investment in its more traditionally targeted machines. That unburdens the model, reducing the necessity for it to appeal to as wide a range of customers as possible and, in all likelihood, further increasing its chances of success. With the Urus nearly singlehandedly doubling Lamborghini sales volume since it launched, there's likely still plenty of room for Ferrari's prancing horse to stretch its legs yet.

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[ate one too]

Forza Ferrari ... now get the F1 team back into more winning ways ( drop Vettel and replace with Lewis )

[ate one too]

Ferrari only build cars to customer orders plus dealer demos.

Anyone buying a Lusso in the hope they can buy a Pista deserves a kicking, much like those buying Porsche SUVs and boggo 911s in the hope they can buy a GT3.