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Old 05-08-2013, 12:46 PM   #1
warpath
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Default Ferrari CEO Wants the Brand to Become More Exclusive and Focus Less on Growing Sales

Image is everything...

Carscoop: http://www.carscoops.com/2013/05/fer...come-more.html



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Ferrari’s range today is larger than ever, with the Maranello plant making no less than five six: the California, 458 Italia, 458 Spider, F12 Berlinetta, FF and soon, the range-topping LaFerrari.
The Italian carmaker sold 7,318 cars last year, a record for the company and 50 percent more than in 1991, when Luca di Montezemolo became Ferrari CEO. However, there’s a thin balance between sales and exclusiveness, and Ferrari’s boss certainly knows it.

“My focus this year and in the years to come is not to grow volume but to increase the exclusivity of Ferrari. This protects our margins and residual values for our customers,” di Montezemolo said in an interview with Automotive News Europe.

Montezemolo explained that Ferrari’s finances could continue to improve even if unit sales are static, provided that profit margins are increased. He said Ferrari aims for a profit margin of around 15 percent this year, following 14.4 percent last year and 14.1 percent in 2011.

Making Ferrari cars more exclusive is a way to reach this target, but how is that possible for a brand that already is a benchmark for exclusiveness? Di Montezemolo has the answer: “On average, a customer adds options worth 25,000 euros, which is 10 percent of the retail price. Another way to personalize a Ferrari is our Tailor-Made program, which adds 50,000 euros on average. This results in more personalized, more unique cars that keep a higher residual value over time.”

If that’s not exclusive enough for some customers, Ferrari also offers its Special Projects program. Montezemolo said the SP division made “about” 10 cars so far, although only four were made public, with Eric Clapton’s SP12 EC, John Walson’s P540 Superfast Aperta and Peter Kalikow’s 45 Superamerica being three of these one-off models. “Some collectors do not want to make their one-offs public,” Montezemolo explained the secrecy surrounding these unique cars.
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Last edited by warpath; 05-08-2013 at 12:55 PM.
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Old 05-08-2013, 01:09 PM   #2
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Smart move.

Probably should offer a gated shifter option for $50k. And people would get it because . . . exclusive.
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Old 05-08-2013, 02:09 PM   #3
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I'm sure they would like to shift to selling only 1 million dollar ferraris.

Joking aside, it's nice to see someone focus on something other than the ever popular aspect of growth, but I don't like what they're focusing on (ripping people off in the guise of exclusivity).

Why does no one seem to want to focus on making market shattering products any more in the auto industry. Same reason Apple sells their crap for way too much I guess. People love to identify with a brand, the whores. Stop caring about nameplate. Start caring about value.
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Old 05-08-2013, 03:23 PM   #4
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By market shattering, do you mean making cars that are impossible to make a profit on?
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Old 05-08-2013, 04:38 PM   #5
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No, I think profit margins for big companies should be around 8%. And if it's a world brand name, even if it's "small" in terms of market share, it's big enough to have low profit margins and still succeed. I'm talking net profit margins.

But, past a certain price point, I think it should shift to more of a static number where you're just flipping expensive materials because that's what you want to sell. Say, $5000 flat rate on cars over $55k? IDK what a good number is.

All I can equate it to is they're doing a service of combining materials and selling said materials in a package. It's like waiters. More and more I'm starting to ask "why does someone deserve more just because my food (the materials) are more expensive? They're doing the same damn job that anyone else would do." And so instead of percentage based tips, I start capping it off at $5, because the food being more expensive doesn't in and of itself imply the service is better, and most of the time it isn't. It's the same at applebees as it is at ruth chris. Maybe the people look nicer, but what the **** do I care. I'm there for food. Serve me drink. Carry plate out. Don't talk or try to top my water off every 30 seconds. Not hard. Car manufacturers are the same. The costs come from construction techniques and materials, not prestige or image or any of that bull ****. Which is why I'd never buy a super car.
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Old 05-08-2013, 04:42 PM   #6
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Quote:
Originally Posted by SCRAPPYDO View Post
By market shattering, do you mean making cars that are impossible to make a profit on?
No,

Design cars with very little compromise in terms of cost, sell at an appropriate price (read High), and also reap the benefits of exclusiveness of a limited production because of unorthodox methods/manufacturing. Not a bad model to work with if you already have the recognition.

Even though it sound more like “we are going to just make fewer to charge higher prices”.
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Old 05-08-2013, 04:43 PM   #7
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Design cars with very little compromise in terms of cost, sell at an appropriate price (read High), and also reap the benefits of exclusiveness of a limited production because of unorthodox methods/manufacturing. Not a bad model to work with if you already have the recognition.
How they should do it

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Even though it sound more like “we are going to just make fewer to charge higher prices”.
How it will happen.
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Old 05-08-2013, 05:32 PM   #8
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Does this mean no more overpriced ferrari polos, coffee mugs and underwear?
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Old 05-08-2013, 05:32 PM   #9
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This makes sense with the bigger Fiat corporate plan. They seem to be bringing Alfa and Maserati upscale for the premium higher-volume market and keeping Ferrari for the top-end consumer.

And they do make more money on clothes, toys etc I think, so exclusivity of the cars would only help that market.
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Old 05-08-2013, 07:38 PM   #10
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My statement was based on purely affordable cars.
To me these cars are already exotic and exclusive. Making them more so is purely a matter of stroking the egos of the buyers a bit more... which is fine with me.
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Old 05-08-2013, 10:10 PM   #11
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Ferrari understands it's easier (and ultimately more profitable) to sell the "Ferrari mystique" instead of actual Ferraris.

I can't decide if Montezemolo's announcement is good for Ferrari as a boutique brand or just represents incredible cynicism.
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Old 05-08-2013, 10:25 PM   #12
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Ferrari understands it's easier (and ultimately more profitable) to sell the "Ferrari mystique" instead of actual Ferraris.

I can't decide if Montezemolo's announcement is good for Ferrari as a boutique brand or just represents incredible cynicism.
But hasn't Ferrari been always about selling the mystique? Sure they occasionally make some truly amazing cars, and I'd argue that they still do (the 458 Italia, for instance). But a company that sells products that are so exclusively expensive, under such a tight control of the media, all the while selling T-shirts and watches to people that will never make more than 10% of the income of a typical Ferrari owner, is selling something other than just the metal.
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Old 05-09-2013, 07:04 AM   #13
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I would love to see how much Ferrari makes on fashions and accessories as compared to cars. They must make a killing as increasing the mystique will definitely spur the growth of a clothing line or a watch line.
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Old 05-09-2013, 09:56 AM   #14
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I would love to see how much Ferrari makes on fashions and accessories as compared to cars. They must make a killing as increasing the mystique will definitely spur the growth of a clothing line or a watch line.
I confess when I was 13 I asked for a pair of Ferrari shoes for christmas as my big present. $100.00. Loved em, but missed out on the big lego kit (which was my big gift every other year).
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Old 05-09-2013, 10:28 AM   #15
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Does this mean no more overpriced ferrari polos, coffee mugs and underwear?
There will always be overpriced Ferrari swag.


Side note, Lamborghini only sells accessories and clothing through the dealer network. So the prices are too much for used Lamborghini owners, keeping it exclusive.
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Old 05-09-2013, 10:58 AM   #16
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I confess when I was 13 I asked for a pair of Ferrari shoes for christmas as my big present. $100.00. Loved em, but missed out on the big lego kit (which was my big gift every other year).
The Ferrari Puma shoes were

The Ferrari magic died for me when I went to a F1 race in Germany. So much Ferrari stuff being worn, big Ferrari flags everywhere... I think selling this stuff en masse dilutes the brand. If I were in the market for a supercar, I wouldn't want to be associated with the people who buy Ferrari merchandise.
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Old 05-09-2013, 11:00 AM   #17
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rich people?
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Old 05-09-2013, 01:14 PM   #18
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The Ferrari Puma shoes were
Just got a fresh pair myself; thank god the logo is tiny!
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Old 05-09-2013, 01:46 PM   #19
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Originally Posted by WRXHillClimb View Post
All I can equate it to is they're doing a service of combining materials and selling said materials in a package. It's like waiters. More and more I'm starting to ask "why does someone deserve more just because my food (the materials) are more expensive? They're doing the same damn job that anyone else would do." And so instead of percentage based tips, I start capping it off at $5, because the food being more expensive doesn't in and of itself imply the service is better, and most of the time it isn't. It's the same at applebees as it is at ruth chris. Maybe the people look nicer, but what the **** do I care. I'm there for food. Serve me drink. Carry plate out. Don't talk or try to top my water off every 30 seconds. Not hard. Car manufacturers are the same. The costs come from construction techniques and materials, not prestige or image or any of that bull ****. Which is why I'd never buy a super car.
They're doing the same job, but it's safe to say that in most cases, the experience I had when eating my $50 steak at Fleming's in Newport Beach was a lot better than my experience when eating my $15 steak at Outback in Costa Mesa a few miles away -- food aside. One server brought me my steak and occasionally re-filled my soda. The other server brought me my steak, asked me if I preferred black or white napkins, brought samples of various wines (which I didn't end up buying anyway), cleaned my table off with some little tool, introduced me to the restaurant manager (who addressed me as "Mr. _____"), etc. Guess which one worked where. And yes, that server did get a bigger tip, for making me feel like a king. The other one got a smaller tip, for sticking with just the bare essentials, which isn't a bad thing.

Same thing with cars. The experience and the sense of occasion does make a difference to some people, if it's something you're into. There are people who make truckloads of money who would never buy anything nicer than a BMW or a Benz (which most middle-class people could afford anyway), but those who do make that kind of bread and are really into cars will feel differently.
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