Fer­rari CEO says cre­ation of sport util­ity ve­hi­cle ‘prob­a­bly will hap­pen’

The Hamilton Spectator - - BUSINESS - COLLEEN BARRY MI­LAN —

Fer­rari’s chief ex­ec­u­tive told in­vestors Wed­nes­day that the lux­ury sports car­maker will look at build­ing a cross­over util­ity ve­hi­cle, but promised any model it pro­duces would be unique and not com­pro­mise the brand’s ex­clu­siv­ity.

CEO Ser­gio Mar­chionne has in the past colour­fully dis­avowed Fer­rari en­ter­ing the util­ity ve­hi­cle seg­ment. Dur­ing the 90-minute in­vestor call, an­a­lysts, one af­ter the other, cau­tioned Mar­chionne about tar­nish­ing the Fer­rari name.

Mar­chionne tried to as­suage them.

“The an­swer is, it prob­a­bly will hap­pen, in Fer­rari style,” he told an­a­lysts. “Fer­rari has been known his­tor­i­cally to be able to re­de­fine and de­fine seg­ments of the auto space. “

The util­ity ve­hi­cle seg­ment “is too big and it’s too invit­ing” the CEO said.

“And I think that we have a lot of our cus­tomers who will be more than will­ing to drive a Fer­rari­branded ve­hi­cle that has that kind of util­i­tar­ian ob­jec­tive,” he added.

Fer­rari would not be com­pet­ing with Porsche’s Cayenne or the SUV Lam­borgh­ini ex­pects to un­veil this year if it en­ters the util­ity ve­hi­cle arena, Mar­chionne said.

If Fer­rari de­vel­oped a car that looked like “ei­ther a BMW or even a Bent­ley SUV, I think I would de­serve to be shot,” he said in a twist on com­ments made dur­ing pre­vi­ous an­a­lyst calls that ap­peared to all but rule out a Fer­rari SUV.

Mar­chionne has said he wants to trans­form Fer­rari into a lux­ury goods maker, lever­ag­ing the brand into ad­ja­cent prod­uct lines. Lux­ury leather wear and ap­parel mak­ers can see mar­gins of 36 per cent or more at the up­per ech­e­lons.

The CEO said he would pro­vide de­tails on those plans dur­ing the first quar­ter of 2018, along with ad­di­tional de­tails on fu­ture mod­els and the role of the For­mula 1 team in the over­all strat­egy.

The brand has pro­tected its ex­clu­siv­ity by lim­it­ing the num­ber of ve­hi­cles it pro­duces each year and launch­ing lim­ited-edi­tion cars for hard-core, loyal cus­tomers, like the La Fer­rari.

Mar­chionne has edged those num­bers up from 7,000 ve­hi­cles to over 8,000, while an­a­lysts see a nat­u­ral ceil­ing at 10,000. Af­ter that point, Fer­rari would lose pref­er­ences on emis­sions caps af­forded small man­u­fac­tur­ers.

But Mar­chionne said there were ways for Fer­rari to deal with those is­sues should it push up pro­duc­tion.

THE AS­SO­CI­ATED PRESS FILE PHOTO

Fer­rari re­ported Wed­nes­day that its net profit for the three months ended June 30 was 136 mil­lion eu­ros (US$161 mil­lion), up from 97 mil­lion eu­ros.

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