Their two million dollar vehicles gave margins only companies like Apple normally hit
Ferrari has revealed soaring profits, mostly thanks to the sale of outrageously expensive vehicles that only the richest people in the world could afford.
The LaFerrari Aperta can be acquired for a little over $2 million, but has been met with very high demand despite that price tag.
The supercar is a 950 horsepower V12 hybrid convertible that Ferrari says is a, “futuristic and absolutely extreme car that seamlessly marries form and function whilst still retaining clear links to classic Ferrari styling cues.”
What it is, in short, is a beast.
The car was rolled out in 2017, and the company has subsequently announced a record first quarter profit.
Those first quarter profits were up 60 percent on 2016 at $136 million, with a 22 percent increase in revenues at $901 million. Over the full year, Ferrari profits are expected to hit $3.6 billion.
V12-powered cars sold fifty per cent more than in 2016 for the legendary Italian automakers.
When Ferrari tried to sell less
Ferrari profits are, as Bloomberg points out, notable for that highly unusual achievement of being almost on a par with those of Apple Inc.
The company actually used to limit sales of its cars to 7,000 per year to ensure that the brand remained exclusive. But the call of the Chinese market, in particular, became too loud, and this limit was abandoned.
Ferrari CEO Sergio Marchionne has now suggested global sales could be increased to 10,000 cars a year over the coming years.
CNN Money quotes Marchionne as saying: “We’re comfortable now that extensions are possible without damaging the core of the business itself.”
Ferrari theme parks and hats
Ferrari is an unusual brand among automakers, in that people are desperate to be associated with the brand even if they don’t own any of its vehicles.
It’s not uncommon to see a guy (usually a guy, but not exclusively) walking around a city sporting at least a Ferrari cap, often a Ferrari T-shirt, and sometimes a full outfit of Ferrari merchandise that makes them look like a walking billboard.
Tesla may be one of the world’s trendiest and most admired vehicle brands, but we’re not at a stage yet where we see men in head-to-toe Tesla outfits walking around downtown.
Ferrari even has two theme parks: one in Abu Dhabi and, more recently, one in Spain.
Yet none of this has made the brand in the least bit tacky (it’s hard to call any company that has a $2 million dollar product tacky.)
In fact, the newly revealed Ferrari profits, “show how Ferrari fishes in the same pool as the luxury brands,” and “simply uses its cars as bait,” according to Massimo Vecchio, an analyst with Mediobanca in Milan who was speaking to Bloomberg.
Some people love Ferrari for the incredible cars, but some love it just for the gravitas, style and history associated with the brand. Some people, presumably those willing to spend $2 million, love it for both.