
Benedetto Vigna, the chief executive officer of Ferrari, is steering the iconic carmaker into new territory, drawing parallels between his company and luxury brands like France’s Hermes. Vigna, with a background as a theoretical physicist, often illustrates his vision with diagrams, much like a professor at a blackboard. His argument is not merely that Ferrari is a luxury-goods company, but that it stands as a unique entity within that realm.
The Italian manufacturer of high-end sports cars has managed to boost sales while adhering to the philosophy of its founder, Enzo Ferrari, who famously stated that the company should sell “one less car than the market demands.” Despite its expansion, Ferrari maintains its exclusivity, particularly thriving in regions like the Middle East where sales have historically been minimal. Recently, Ferrari has also implemented significant price increases, a strategy that has been more aggressive than in the past.
Price Increases and Market Strategy
Stephen Reitman of Bernstein, a brokerage firm, notes that the price of new Ferrari models typically exceeded their predecessors by 3-5 percent. However, the new 12Cilindri model is priced a staggering 30 percent higher than the 812 Superfast it replaces. This pricing strategy extends to Ferrari’s flagship cars, which are released sporadically and justified by the advanced technology derived from racing. The upcoming F80, priced at €3.6 million, will soon be delivered, following the LaFerrari, which debuted 12 years ago at around €1 million. Jefferies, a bank, estimates that total revenue from the F80 will surpass €2.3 billion.
To bridge the gap between major launches, Ferrari has begun producing special limited-edition cars, such as the Daytona SP3 unveiled in 2021, priced at €2 million. These vehicles are high-margin styling exercises based on existing models. Additionally, Ferrari now offers a wide range of personalization options, from custom paint jobs to luxurious interiors, which can add up to 20 percent to the car’s price. Barclays, a bank, predicts that the average cost of a Ferrari will exceed €500,000 next year.
Customer Loyalty and Brand Exclusivity
Ferrari’s ability to charge premium prices is supported by the devotion of its loyal customer base. Approximately 80 percent of its customers are repeat buyers. Many enthusiasts visit the factory in Maranello, Italy, with some reportedly moved to tears. By maintaining close relationships with about 180 dealerships worldwide, Ferrari can engage its most passionate collectors, drawing them into an exclusive circle. Despite tariff-induced price hikes, demand from the American market remains strong.
The F80, limited to just 799 units, was three times oversubscribed. Securing a purchase required customers to have previously bought several Ferraris and to act as brand ambassadors by attending company-organized car shows. Even then, there was no guarantee of selection. Enrico Galliera, Ferrari’s marketing chief, known as “Mr. No,” frequently declines requests from potential buyers, who fear that any sign of dissatisfaction could result in being pushed down future waiting lists.
Comparisons with Luxury Fashion Brands
Ferrari’s operations bear similarities to ultra-luxury fashion brands like Hermes. However, Vigna believes Ferrari possesses advantages beyond those of high-end leather goods manufacturers. The company combines a rich heritage with cutting-edge technology, participating in high-profile racing events like the British Grand Prix, which are integral to its branding strategy. In contrast, Hermes hosts a show-jumping tournament, which, while classy, lacks the adrenaline rush of motorsport.
Chinese consumers, who have recently curtailed spending, represent just 8 percent of Ferrari’s sales, compared to up to 40 percent at Hermes. Ferrari’s customer base is almost exclusively the ultra-wealthy, offering some insulation from economic downturns. In contrast, Hermes derives a significant portion of its revenue from more affordable items like scarves and perfumes, appealing to a broader audience.
Future Challenges and Electric Transition
Despite its current success, Ferrari faces potential challenges. Some critics argue that its aggressive pricing strategy could eventually undermine its brand exclusivity. Moreover, the company shares a common challenge with other automakers: the transition to electric vehicles. Ferrari’s first electric model, the Elettrica, is set to launch next year. The company has doubled the size of its Maranello factory to accommodate electric vehicle production without reducing its current output.
However, the reception of electric supercars has been lukewarm, and any misstep could tarnish Ferrari’s pristine image. Reports emerged on June 17 that the company would delay its second electric model by two years, pushing its release to 2028. This delay presents a significant challenge for Vigna, as he navigates Ferrari’s evolution in an increasingly electric automotive landscape.
As Ferrari continues to evolve, balancing its prestigious heritage with modern technological advancements, the company’s ability to maintain its allure and exclusivity will be closely watched by enthusiasts and industry experts alike.