Ferrari to launch special editions in bid to boost profit
Italian luxury car maker’s new CEO unveils five-year plan
MARANELLO, ITALY—Ferrari NV plans to launch a series of special-edition models, a larger car to rival sport-utility vehicles and a move into other sectors as part of the Italian luxury-car maker’s drive to increase volume and double profit by 2022.
The initiatives are part of a five-year plan unveiled Tuesday by new Chief Executive Louis Camillieri, who took the wheel of the storied company in July after the unexpected illness and death of Sergio Marchionne.
Ferrari under Mr. Marchionne had already started to boost production beyond self-imposed limits meant to protect the brand’s exclusivity. Its former chief had also alluded to the introduction of a larger, taller model similar to an SUV, prompting fans and some analysts to warn it could harm the brand.
With these concerns in mind, Mr. Camillieri, like his predecessor, was careful not to call the larger Ferrari, which will be introduced in 2022, an SUV. It will, however, likely compete with SUVs from the likes of Lamborghini and Bentley. Mr. Camillieri said the new vehicle will be called “purosangue,” which means thoroughbred in Italian.
Mr. Camillieri, like his predecessor, was also careful not to call the larger Ferrari, which will be introduced in 2022, an SUV. It will, however, likely compete with SUVs from the likes of Lamborghini and Bentley. Mr. Camillieri said the new vehicle will be called “purosangue,” which means thoroughbred in Italian.
“It’s something you haven’t seen before so don’t give it acronyms,” Mr. Camillieri said in response to a question from an analyst imploring the CEO to say if the new vehicle was an SUV or something closer to a sedan.
Ferrari said it would produce no more than 500 of the first two cars in a series of special-editions based on some of the brand’s best-known models. The first two are modernized versions of the Ferrari 750 Monza race car that dates from the 1950s—the Monza SP1, which has only a seat for the driver, and the two-seat Monza SP2.
The new cars don’t have a traditional windshield and will instead be outfitted with what Ferrari is calling a “virtual windshield” that funnels air off the hood through a duct and up vertically in front of the driver, creating a barrier against the wind. Included in the price of the car—in addition to the 810 horsepower engine, the most powerful ever in a Ferrari—is a driving jumpsuit made by high-end Italian designer Loro Piana.
Ferrari will present the cars to the public and give pricing details at next month’s Paris Motor Show. They will cost more than $1.5 million, according to a person familiar with the company’s plans. Ferrari said it already has orders for the cars it will make. It didn’t say when the next specialedition model will be unveiled.
Mr. Camillieri, like his predecessor, was also careful not to call the larger Ferrari, which will be introduced in 2022, an SUV. It will, however, compete with SUVs from the likes of Lamborghini and Bentley. Mr. Camillieri said the new vehicle will be called “purosangue,” which means thoroughbred in Italian.
“Concentrating their effort on special edition vehicles and on expanding their range to this bigger vehicle is the right move because moving into other luxury areas for a brand so tightly linked to cars is a big risk,” said Giuliano Noci, a professor of strategy and marketing at the School of Management at Milan’s Politecnico university.
The special edition cars have particularly high profit margins while the new larger vehicle will appeal to current Ferrari owners who want a vehicle they can drive more often and will also attract first-time buyers, said Professor Noci.
Mr. Camillieri’s presentation at Ferrari’s factory complex in Maranello north of Bologna is his first in-person briefing to investors and analysts since being parachuted into the role in the summer with no experience of running a car company.
Mr. Camillieri, who was a Ferrari board member and chairman of the company’s racing sponsor Philip Morris International Inc., spooked investors on a conference call shortly after taking over by describing Mr. Marchionne’s target to double gross operating profit by 2022 as “aspirational.”
On Tuesday, Mr. Camillieri didn’t back away from that characterization but did qualify it.
“Our objectives are ambitious but they are based on a meticulously constructed model pipeline, our enviable pricing power and appropriate investment levels to support our key initiatives during the plan period and beyond,” said Mr. Camillieri.
Chief Financial Officer Antonio Picca Piccon said the company would “almost double” adjusted gross operating profit to between 1.8 billion euros ($2.1 billion U.S.) and 2 billion euros in 2022 from 1 billion euros last year.
Revenue is expected to be about 5 billion euros in 2022 compared with 3.4 billion euros last year.
The company is targeting an operating profit margin of 25% in 2022, 2 1 ⁄2 percentage points higher than in 2017. Most car makers struggle to get a 10% margin.
Ferrari declined to give a volume target for 2022.
The company also said it would increase its dividend to 30% of profit this year compared with 25% in 2017.