Ferrari just getting started | PH Footnote
Maranello's latest results suggest it is on a roll. And there's still an SUV to come...
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.
Get Alonso back. Alonso and Leclerc will be a tasty combination.
Though admittedly Lewis and Leclerc would also be an interesting pairing.
I think the problem with F1 is not the drivers, it is the sport itself. Hopefully 2021 can address some of the short comings.
Till then there's MotoGP of course, which despite Marquez conquering all, is a great spectacle.
Recent competition has forced them to up their game. No duffers in their line up now.
Strong residuals remain key but oversupply will stall their progress if they are not careful.
It’s a tightrope - increased volumes will see profits soar further but will residuals slide and will the brand lose some of its specialness?
Who knows?
With a broader customer base the dealer network will need to improve it’s performance too.
Whilst there are many good dealers, there are too many stories of shoddy customer service and arrogant sales teams (‘because we are Ferrari’).
New customers migrating from other premium brands (eg Bentley, Rolls) will expect the same level of care and attention and will be pretty vocal if they don’t get it (Land Rover experienced this when the RR Sport was launched).
That being said, it’s a nice challenge to have though.
Can't stand the twunt.
Love the team.
Can't stand the twunt.
Love the team.
If only Mazza, Lancia and Alfa, to an extent, could undertake the same kind of renaissance
So much more appealing to my eye than the wedge-shaped Lambos, which to me are about as sexy as a warm cup of tea.
I love the 458 but the rear quarter is so bland so having the vent on the 488 made it look so much nicer.
A ferrari SUV coming, electric cars coming, etc etc when sports cars are electric no one will care as much about brands "how nice did that Ferrari battery sound when it came flying past!" etc
The valkyrie could take away some attention from them as they don't have a competitor, i'm imagining it will generate a lot of headlines if it's as good as we all hope
I think eventually in the far future they'll sell out the brand and make £80k cars that you'll see everywhere
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