The Horse Whisperer

We’re perched on chairs made from recycled cardboard – a nod to the company’s newfound enviro focus. On stage, Ferrari’s charismatic chairman, Luca di Montezemolo, is holding court in front of a gathering of 250-odd journalists from around the world.

The gist of his message is simple: Ferrari is healthy and profitable but – despite strong demand for its cars – the company actually plans to build and sell less next year than this. It’s an unusual admission in an industry where company top brass is forever touting growth and bigger, better numbers.

It’s all part of the big picture though, stresses di Montezemolo, saying the objective is to ensure the prancing horse brand retains its aura of exclusivity. The dapper CEO says it’s in keeping with company founder Enzo Ferrari’s mantra of always building one less car than the market demands.

“A Ferrari is like a beautiful woman – she must be worth waiting for and desired. I base my ideas on what I learned from Enzo Ferrari, if we produce less cars, we will not flood the market and it makes our used cars more desirable too.”

“My focus this year [2013] and in the years to come is not to grow volume but to increase the exclusivity of Ferrari,” di Montezemolo says.

“This protects our margins and residual values for our customers. The exclusivity of Ferrari is fundamental for the value of our products. We don’t sell a normal product – we sell a dream.”

CASH RICH
Ferrari’s revenues in the first quarter of this year were up eight per cent to 551 million euros ($715 million), yielding a net profit of 54.7 million euros ($71 million). This in its self is an increase of 42 per cent over the same period of last year. In other words, there are clearly no glaring shortcomings in the Maranello-based company’s business model. So far...

Selling fewer cars this year (Ferrari sold 7318 cars in 2012) won’t necessarily diminish revenues, as among the brand’s upcoming big-ticket items is the new LaFerrari hypercar that launches next month. It wears a pricetag around the $1.3m. However, you can put that chequebook away – all 499 examples slated for production have already been pre-sold.

Although the LaFerrari is a propelled by an enviro-friendly hybrid powertrain (its potent V12 engine is backed up by a supplementary electric motor), di Montezomolo says the company will never build an all-electric car on his watch, which undoubtedly comes as a huge relief to every died-in-the-wool petrolhead out there.

The LaFerrari launches into the market around the same time as mega-exclusive rivals from Britain and Germany – Porsche is currently readying its 918 uber-flagship, while McLaren is applying the finishing touches to its ultra-high-tech P1. Both of these will also be priced around the $1m mark and are in strong demand – clearly a sign the worst of the global recession is over.

HAND MADE
Ferrari’s Maranello factory produces 32 cars a day, virtually no two vehicles exactly the same. There are thousands of permutations based on trim colours and materials, optional equipment and wheel designs and few buyers who fork over a large wad of cash for an ultra-premium car these days do so without individualising it in at least some way.

Rolls-Royce and Bentley are big on personalised tailoring, and Ferrari has also gotten into the act via its Atelier and Tailor Made divisions. Apart from giving the customer exactly what he or she wants, these operations also add to the profit margin Ferrari earns from each car – so it’s a case of win-win.

The Atelier division can provide any number of paint and interior trim combinations –  provided they’re in keeping with the brand’s core values.

If you walk in and suggest you’d like your Ferrari painted to match your tie or nail polish, the team will do its best to accommodate your request. However, if you barge in and say you want a pink Ferrari, you’re not going to have much luck – as this would conflict with the image Ferrari wants its offerings to project. The Atelier division does periodically receive requests it can’t fulfil, but in each case, it will propose an alternative solution.

Whereas the Atelier team only deals in colours and trim materials (nothing is changed as far as the car’s overall design is concerned), the Tailor Made, One-to-One, and Special Projects divisions can accomplish virtually anything.

A high-profile example of this division’s work is the bespoke Ferrari SP512 (which started life as a 458 Italia) prepared for musician Eric Clapton. A keen ‘Ferraristi’ and car connoisseur, Clapton wanted his car to look like the 512 Berlinetta Boxer produced during the 1970s and ’80s. Ferrari obliged, and the completely re-bodied car that resulted was dubbed the SP512 EC.

Clapton was delighted. Ferrari lightened his wallet to the tune of $4.7 million and all parties ended up getting what they wanted.

In a similar vein is Ferrari’s Classiche division, which was set up to restore and repair customer-owned Ferraris that are more than 20 years old.

As we walk through the workshop during our visit, there’s a 250 GTO that’s undergoing a complete front-end rebuild after its owner managed to crash it in a historic race. The repair bill will be around $150,000-$200,000, but that’s almost insignificant when you take into account the car is valued at an estimated $30 million (an apple-green 250 GTO that belonged to former F1 driver Stirling Moss recently sold for $35 million).

The Classiche division’s archives contain the technical drawings for every Ferrari built since 1947, so every car brought in for restoration is rebuilt to precise factory specifications.

When you have a fan base as strong as Ferrari’s (the brand has 12 million Facebook followers), there’s also a lot of money to be made in merchandising, and the prancing horse has done exactly that. Last year it banked $68 million in profits from selling branded caps, T-shirts, shoes, mobile phones, watches and so forth.

The Italian sportscar maker has forged alliances with Vertu, Hublot, Tod’s Shoes, Puma (which supplies all the apparel for Ferrari’s F1 team, apart from selling a line of Ferrari-branded gear), Mattel, Lego, Sony, Microsoft, Shell and more. It’s been a highly lucrative exercise, too. As an example, more than 14 million Lego Ferraris have been sold through Shell petrol stations around the world.

Another branding success story is Ferrari World in the UAE capital of Abu Dhabi, which spans a massive 200,000 square metres and houses – in addition to the world’s fastest rollercoaster – the biggest and best performing Ferrari Store in the world.

The giant theme park has been such a hit – both in terms of revenue generation and image building – that another one will follow over the coming years. Ferrari execs won’t as yet reveal the location, but there’s a reasonable chance it will be in China, opening up the brand to what’s emerging as the world’s largest car market.

However, di Montezemolo says that while the spin-off business has been great for Ferrari, its focus would always remain on its core activity – building, selling and racing cars.

This is heartening news, not only for diehard Ferraristi, but also for anyone who appreciates one of the purest (in terms of its engineering integrity) and most storied brands in the automotive arena.

Thirty or 40 years ago, this may have been the case, but the Ferrari factory of today is as automated and cutting edge as virtually any around the world. Although the tradition of handcrafting is still alive and well, much of the work is carried out by highly sophisticated robots that guarantee speed and precision.

The ambience within the various factory divisions is also not what I had anticipated. The painted floors are almost shiny enough to see your reflection, while all around are pot plants that, apart from having a soothing effect, add oxygen to the air.

Walking through the assembly line where the V12 models (FF and F12) are built, I gaze out the wall-to-wall windows to see picturesque hills and mountains in the distance.

Employees are also well looked after, as Ferrari provides them with facilities such as a cinema, gym (with personal trainers) and subsidised schooling for those with children. No surprises, then, that Ferrari was nominated as one of the best companies to work for in Europe.

The famous symbol of the Ferrari race team is the Cavallino Rampante (‘prancing horse’) black prancing stallion on a yellow shield, usually with the letters S F (for Scuderia Ferrari), with three stripes of green, white and red (the Italian national colours) at the top.

The road cars have a rectangular badge on the bonnet, and, optionally, the shield-shaped race logo on the sides of both front wings, close to the door.

The northern Italian town of Maranello (near Bologna) has been home to Ferrari since the 1940s. Occupying more than 250,000 sq metres, the factory’s 45 buildings house more than 3000 workers. It’s here that passion, innovation and technology combine to create the company’s GT and Formula 1 cars.

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