Ferrari’s elegant sports cars and its Formula 1 team have made the rampant horse brand one of the most powerful in the world. Now, while preparing your public offering, you want to earn cash from that cache.
The goal is to position Ferrari not just as an automaker, but as a luxury goods company.
That could mean refining its promotional product line or creating a chain of exclusive clubs and hotels targeting Ferrari owners and wealthy customers, analysts say.
Company president Sergio Marchionne will present his vision to investors in the coming weeks, but the potential already has two worlds on edge.
In the Italian-made luxury goods sector, the interest revolves around whether Marchionne’s ambitions could facilitate the creation of an alliance of high-end manufacturers, which can keep pace with French conglomerates like LVMH. Among financial analysts, it’s the numbers and potential brand equity that are driving the conversations.
“I think cars are almost secondary to Ferrari,” Marchionne said last month when he announced his plans to separate Ferrari from mass-produced parent company Fiat Chrysler Automobiles NV. It sounds sacrilegious. But it is actually a luxury brand.
Persuading the investment community of that distinction could multiply Ferrari’s market value, placing it in the category of companies that derive value not just from the quality of materials and product, but from their appeal.
“If you think about the capacity of the Ferrari brand in the luxury market, there are many avenues you can take from a product perspective,” said Anil Valsan, analyst at EY automotive. But at the same time, you have to be very careful not to damage the brand. It is absolutely key that the value of the brand is not lost by diversifying into too many products.
Ferrari could take a gamble and expand its range of cars to include globally profitable off-road models. That would make your vehicle catalog more similar to competitors like Porsche or Bentley. Lamborghini, another Italian sports car maker, has previewed an off-road prototype.
On the other hand, Marchionne has already shown his interest in linking automotive and fashion by signing the couturier Ermenegildo Zelda to the board of Fiat Chrysler, with the idea that he will help high-end brands such as Alfa Romeo and Maserati. Zegna has designed a limited edition interior for the Maserati Quattroporte and Gucci has designed a Fiat 500 as well.
When Couturier Giorgio Armani was asked about the possibility of creating an Italian luxury group, the designer said that “bringing together the most beautiful Italian brands is fascinating.”
“It all depends on the quality of the product, or who would want to join,” he said behind the scenes of his latest shows.
Ferrari polishes its brand to go public
