Ferrari looking to put a carthorse in its stable
FERRARI is considering adding a roomy four-seat “utility vehicle” as part of a major expansion push beyond its traditional supercar niche in a bid to double profit by 2022, people familiar with the matter said.
The final five-year plan under chief executive Sergio Marchionne, who’s set to retire in 2021, will target boosting annual deliveries beyond a self-imposed limit of 10 000 cars, which allows the company to operate with less-stringent fuel-economy rules, said the people, who asked not to be identified because the matter is private.
Under the plan, which is likely to be unveiled in early 2018 and could expose the car maker to stricter environmental regulations, Ferrari will also build more hybrid models to improve its vehicles’ efficiency and woo new wealthy buyers, the people said. A Ferrari spokesman declined to comment.
Since taking charge of Ferrari in 2014, Marchionne has been pushing volume, already blowing past an earlier cap of 7 000 cars. While that approach risks diluting the brand’s exclusive cachet, the 65-year-old flanked delivery growth with exclusive limited-edition models, such as the $2.1 million (R27.52m) LaFerrari Aperta convertible.
He’s now seeking to dial up that effort to secure Ferrari’s independence as the car industry grapples with the strains of shifting to electric-powered cars.
Ferrari, which reports second-quarter figures today, is on pace to increase adjusted earnings before interest, taxes, depreciation and amortisation more than 14 percent this year to at least €1 billion (R15.42bn).
The new strategy is likely to include doubling that figure in five years, the people said.
Shares of Ferrari traded in Italy rose 3.1 percent to €91.90 as of 3pm in Milan, valuing the car maker at €16.8bn. The stock is on course to close at the highest price since it started trading on that market in early January 2016.
Among projects being evaluated is a four-seat family car that offers more space
10 000 Ferrari’s self imposed annual car production limit
than Ferrari’s current twodoor GTC4 Lusso. The model is internally dubbed the “Ferrari utility vehicle,” following Marchionne’s previous objections to developing an SUV. The big Ferrari would be targeted at Asian customers, particularly in China, and may alone contribute 2 000 vehicles to annual deliveries, the people said.
Ferrari is studying ways to ensure its sporty style with the new car, which the manufacturer will try to market as a new industry segment rather than as another high-end sport utility vehicle, following the likes of Maserati, Bentley and Lamborghini, they said. The new car, which could have two or four doors, is expected to be sold from 2021, the people said. No final decision on the model has been made.
Ferrari’s current target is to boost vehicle sales to 9 000 cars in 2019 from 8 014 in 2016. Analysts at at Mediobanca, UBS Group and Bernstein predict deliveries could jump to as high as 15 000 under a new strategy, which Marchionne hinted he was developing during his first-quarter earnings presentation in May.
The business plan poses a risk, as raising annual deliveries to more than 10 000 cars a year would push Ferrari beyond its “small vehicle manufacturer” status, which protects it from some US and European fuel-use and emissions rules.
To address those issues, the Italian carmaker, which was spun off from Fiat Chrysler Automobiles in 2016, plans to introduce more hybrid vehicles starting in 2019 to help comply with stricter environmental regulations.
Those models, like the current $1.5m LaFerrari, will be equipped with an electric motor to improve performance and add horsepower.
Meanwhile, boosting output could prompt Ferrari to add a second shift to its factory in Maranello, Italy.