Benedetto Vigna, the chief executive officer of Ferrari, is steering the iconic carmaker into a new era, one that mirrors the luxury and exclusivity of renowned fashion houses like Hermes. Vigna, with his background as a theoretical physicist, approaches Ferrari’s transformation with precision and innovation, akin to a professor illustrating complex theories on a blackboard.
Ferrari, founded by Enzo Ferrari in 1947, has long been synonymous with high-end sports cars. Yet, under Vigna’s leadership, the company is redefining itself as a luxury-goods entity, maintaining exclusivity while expanding its market presence. This shift is evident in Ferrari’s strategic growth in regions like the Middle East and its aggressive pricing strategy, which has seen prices for new models soar by as much as 30% compared to their predecessors.
Redefining Luxury and Exclusivity
The Italian carmaker has successfully increased sales without compromising its elite status. Ferrari’s strategy aligns with Enzo Ferrari’s philosophy of selling “one less car than the market demands,” ensuring that demand always outstrips supply. This approach has been particularly effective in new markets where Ferrari’s presence was once minimal.
Stephen Reitman of Bernstein highlights a significant shift in pricing strategy, noting that the new 12Cilindri model is priced 30% higher than the 812 Superfast it replaces. This pricing strategy extends to Ferrari’s flagship models, such as the F80, which is priced at €3.6 million, with total revenue from this model expected to exceed €2.3 billion, according to Jefferies.
Personalization and Customer Loyalty
Ferrari’s focus on personalization has also intensified, offering customers bespoke options ranging from custom paint jobs to luxurious interiors. These enhancements can add 20% to the car’s price, with Barclays estimating that the average cost of a Ferrari will exceed €500,000 next year. The brand’s ability to command such prices is largely due to its devoted customer base, with 80% of buyers being repeat customers.
This loyalty is cultivated through close relationships with 180 dealerships worldwide, allowing Ferrari to engage its most passionate collectors. The F80, limited to just 799 units, was three times oversubscribed, with buyers needing to demonstrate their allegiance by purchasing multiple Ferraris and participating in brand events.
Comparisons with Hermes and the Luxury Market
Ferrari’s evolution draws parallels with luxury fashion brands like Hermes, known for their exclusivity and high price points. However, Vigna argues that Ferrari offers more, combining rich heritage with cutting-edge technology, and participating in high-profile racing events that are integral to its brand identity.
Unlike Hermes, which derives a significant portion of its revenue from more affordable luxury items, Ferrari relies almost exclusively on ultra-wealthy consumers, making it less vulnerable to economic downturns. Chinese consumers, who are tightening their spending, account for only 8% of Ferrari’s sales, compared to up to 40% for Hermes.
Challenges and the Electric Future
Despite its successful transformation, Ferrari faces challenges. Some industry observers caution that its aggressive pricing could eventually undermine its exclusivity. Moreover, the transition to electric vehicles presents a significant hurdle. The Elettrica, Ferrari’s first electric model, is set to launch next year, but the company has already delayed a second electric model to 2028.
The expansion of Ferrari’s Maranello factory aims to accommodate electric vehicle production without reducing current model output. However, the reception of electric supercars has been lukewarm, and any misstep could tarnish Ferrari’s pristine image.
As Ferrari navigates these challenges, Vigna’s leadership will be crucial in maintaining the balance between innovation and tradition, ensuring that Ferrari remains a symbol of luxury and performance in the automotive world.
