Ferrari plans production boost to meet supercar demand
Legendary supercar maker Ferrari plans to double assembly shifts at its factories to two a day in 2018, as deliveries are scheduled to hit the company’s 9,000-vehicle target a year early. People familiar with the matter, who asked not to be named, say that the increase in production is part of CEO Sergio Marchionne’s plan to boost profit through an expansion of Ferrari’s line-up. Nonetheless, the brand remains committed to preserving Ferrari’s iconic exclusivity, sticking with its $200,000 and upwards price tag.
Ferrari’s share price is up by 83% so far this year
SOURCE: Yahoo Finance
Ferrari plans to double operating profit to about €2 billion by 2022, and this increase in production is just the start. The company will overshoot its self-imposed 10,000 cars delivered per year, and add a sports utility vehicle to its line up. These factors will be explained in more detail early next year, when Marchionne gives his last mid-term strategy presentation before stepping down as Ferrari chief.
Ferrari is benefiting from a global increase in the number of wealthy individuals. The number of millionaires worldwide increased by 36% between 2006 and 2016, to 13.6 million. According to real estate company Knight Frank, this segment could rise by a further 37% in the coming decade, with the Asia-Pacific region outperforming.
Ferrari will ship around 8,400 cars this year, and could increase production by 7% to ship 9,000 in 2018. Marchionne cites the brand’s founder, Enzo Ferrari, regarding this increase, saying that Ferrari should always sell “one car less” than the market demands.
Dominion holds Ferrari in its Global Trends Luxury Fund.
If you would you like to receive the Newsfeeds daily, please click here to sign up now!Help us make this Newsfeed better by rating this article. 1 star = Poor and 5 stars = Excellent
- Click here to print this story: Print
The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.