Could a new Dino push Ferrari into pole position?
Should Ferrari embrace a lower-cost model to bring in new drivers and help swell the company’s top and bottom lines over the next five years? That’s a question that has divided senior decision makers at the exclusive motor brand recently, as they debate whether or not to revitalize the Dino moniker from yesteryear.
Ferrari’s share price is up an astonishing 85% year to date
Source: Yahoo Finance
CEO Sergio Marchionne, whose five-year push for growth will be his last strategic masterplan with the brand, thinks that it’s a risky move. Marchionne was in favour of bringing the lower-priced Dino back to market as recently as 2005, when he told reporters it was a “when, not if” question as to whether the line would be revitalized. Now, he’s not so sure. Marchionne, along with other bigwigs at Ferrari, worries that introducing a lower-priced model could damage the brand’s hard-won exclusivity. On a recent earnings call he said:
“We need to explore ways to attract customers to traditional values of the brand such as style, performance and engine sound before downgrading the entry level price for the brand.”
Allegedly, some of the members of Marchionne’s board were surprised by his reticence. The opposing view is that Ferrari could use such a model to introduce itself to a segment of the market that is currently dominated by players like Audi, Porsche, and McLaren. It is also worth noting that the extent to which it would damage exclusivity is still open to debate: prices would start at around €150,000 (right now, Ferrari’s entry model California T is priced at €190,000) and the number of units shipped annually has not been publically mentioned.
However, the possibly returning Dino is not the only new model that Ferrari is toying with. The company is also considering the development of an SUV in the near future. Debuting both of these new vehicles would undoubtedly lead to more sales in the short term – but would it devalue the brand in the long term?
Dominion holds Ferrari in its Global Trends Luxury Fund.
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