Ferrari plans production boost to meet supercar demand
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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

graph ferrari 20171214

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.


Disclosure

Dominion holds Ferrari in its Global Trends Luxury Fund.


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