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Gautam Sharma7 Oct 2014
NEWS

Ferrari volumes a balancing act, says Marchionne

New Prancing Horse boss says exclusivity cannot be at the expense of availability

Fiat Chrysler boss Sergio Marchionne says preserving the exclusivity of the Ferrari brand is key, but not if it comes at the expense of market demand.

Addressing select members of the media at last week's Paris motor show, Marchionne said the plan is to stick to the 7000-unit cap announced by his predecessor in May this year, even though at the time he claimed Ferrari could sell more than double that.

“For me to tell you that we’re going to sell 10,000 cars today is nonsense and effectively the plan that we put together and that we presented to the markets in May had built in 7000 cars a year and no more,” said Marchionne, who is on the verge of taking over the helm of Ferrari after the unceremonious turfing of long-standing chairman Luca di Montezemolo.

“And that is the only thing I know. I only know that we’re forecasting to make 7000 cars a year. We have built in no increase in volumes. We don’t expect performance to significantly differ from what we’ve done, post the May plan.  

“We have agreed that we would choke volumes to make sure that we would never create a glut of Ferraris in the second-hand market, ever. Because the problem is not new car sales, it’s what happens to used."

However, Marchionne reiterated comments he made last month, when he flagged an intention to break the Prancing Horse's self-imposed 7000 annual production cap in an attempt to limit customer waiting times.

Marchionne said Ferrari must act to prevent frustrated customers defecting to other supercar brands, while maintaining its time-honoured strategy of building one less car than the market demands to ensure exclusivity.

“If you look at the volumes historically, we choke back volumes to the point where we maintain the healthy level of supply between new cars and used cars in the marketplace.

“But I think it would be unwise not to be continuously monitoring market performance in terms of the length of time that it takes us to deliver a car to a customer against what the competition is offering. If you have to wait 24 months to get a Ferrari you’ve waited too long.

“There’s a point at which if you go out of range in terms of delivery times because there are too many people who are waiting for one then I think it’s crazy. You’ve got to be able to buy it.

“[There comes] a point where exclusivity, if it becomes unreachable is no longer exclusivity, it’s like you’re reading a fiction novel, right? You know that there was a car that you could have potentially bought, but you were never asked to look at it so you could have bought it… but not in your life.

“So, let’s not fool ourselves here, we’re in business to try and provide cars to people. I know I want to sell 458s, but you’ve got to make some product available to people who want to buy it.

“We need to be cognisant of the fact that restrictions on volumes need to be monitored continuously about what the impact is on demand. The argument is not an absolute restriction. It needs to be evaluated every time.”  

As an example of the strong demand for pretty much whatever Ferrari rolls out, Marchionne alluded to the $3.6 million 'one-off' (actually, there will be 10 units) that will be revealed in Los Angeles on October 12.

“Luca [di Montezomolo] made reference to this car that we’re going to show in California, for the 60th anniversary. Ten one-offs, 2.5 million euros each and they are all presold,” Marchionne said.  

“Now, I’m not saying that we should have made 20 cars at 2.5 million euros, but I think there’s a point in time at which you need to make the product available.”

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Written byGautam Sharma
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