MARANELLO — Ferrari will cut production by at least 4% this year to preserve the brand’s exclusivity but still hopes to increase profits, its chairman says.
Predicting that the Italian luxury car maker will continue to flourish while the global economic outlook remains uncertain, Luca Cordero di Montezemolo said yesterday that, despite growing sales, production would fall to less than 7,000 cars.
"The strength not to listen to people who say ‘your competitors will benefit from this’ is a choice I learned from (company founder) Enzo Ferrari, who used foresight in enhancing the value of the brand," he told a press conference.
The move was also designed to protect the resale value of the company’s cars. Ferrari’s entry-level California model starts at €185,000 in Italy, and its top-range 12-cylinder F12 costs €272,000.
The luxury car maker sold 7,318 cars last year and makes an important contribution to owner Fiat’s bottom line. For the first quarter, Ferrari earned €80m before interest and taxes on 1,798 cars sold, compared to Fiat’s €603m on sales of about 1-million vehicles.
Mr Montezemolo said Ferrari’s decision to cut production was "shared" with the company’s main shareholders, and comes despite a growth in revenue of 4% to €551m in the first quarter. Its net profit for the first quarter was €54.7m.
Ferrari, which competes with Porsche and Jaguar in the highperformance sports car market, cut production in 2003 for similar reasons, Mr Montezemolo said.
The Ferrari brand’s value enabled it to earn €52m in revenue from 60 merchandising licences of Ferrari-branded clothes, toys, watches and other items last year, said Mr Montezemolo.
He believes the group can increase its profit this year despite the production cut.
Mr Montezemolo said the company had no plans to hold an initial public offering. Financial analysts have speculated that Fiat could spin off or sell part of Ferrari to generate cash to increase its stake in US vehicle maker Chrysler.
Ferrari plans to invest €100m in the next two years on plant improvements at its factory in Maranello, where 3,000 people work building about 32 cars a day.
On Wednesday, the company unveiled a new assembly line building 13,000-15,000 six-cylinder engines for its sister brand, Maserati. The engines will power two new Maserati models, the Ghibli and the Quattroporte, as part of Fiat’s plan to boost Maserati sales to 50,000 in 2015 from about 5,000 last year.
The company spent €40m on the new assembly line, and will hire 250 new staff, most of whom will be employed making the new sixcylinder engine.