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Ferrari Production - An Opinion

Jim Weed

Volume 48 Issue 24

Dec 24, 2023

Is Ferrari production keeping up with demand? Can the company continue to run so far behind orders?

    Sometimes being at the center of all the Ferrari information in the world, well, maybe not all, but probably the greatest database in North America, leads to many interesting phone calls.


    Recently, from several different sources I had nearly the same conversation regarding Ferrari’s new-car ordering system, or lack thereof.


    As I understand it, a customer may order a new car from the dealer. Provided the dealer has an allocation to sell said car.


    The vehicle to be ordered may, or may not, be in current production. What the customer is buying is the opportunity to receive a Ferrari at some point in the future. This lead time can be quoted as far out as four years, possibly more.


    If the Ferrari the customer wants has already been “sold out” a deposit may be taken for a future unknown model. This will hold a slot for the next model to come.


    Want a Purosangue? Nope, no more orders can be taken. How about the new Roma Spider? Sure, put a deposit down and you can pick up your new car in 2027.


    Is this any way to run a business? Clearly the demand is great if customers are willing to buy and wait until…


    Ferrari built its reputation on supplying performance cars and clearly the world demand is clamoring to own the performance and exclusivity a Ferrari offers.


    How long can the company continue to push off its customers to some future date? There are many choices from other manufacturers that can offer instant gratification even if they cannot offer exclusivity.


    Ferrari has had the philosophy to build one less car than the market demanded. The current system would appear to be falling short of that goal by several years.


    In a world of supply and demand it would seem it is not the demand side that is the problem, it is supply. What would happen if Ferrari was able to increase supply? More people could own a Ferrari.


    This could lead to more dealerships to sell and service those cars. That could translate into more profit for Ferrari and since Ferrari is publicly traded, better stock returns.


    Ferrari is already very profitable and factory efficiency is very high. What would happen if Ferrari were to open another assembly line? Build another factory? What if it was in another city?


    Would the cars from Maranello lose some of their luster? Would the future owner of a Roma, Purosangue, 296 GTB, or the next ‘common’ Ferrari, care where it was manufactured?


    Clearly Ferrari is at a crossroad. Manufacturing must be close to maximum. Does Ferrari continue to play the “if you want a Ferrari, you must be willing to wait” game. For a long time.


    Or will they recognize the product they make can become even more popular and, dare I say, more often seen on the road and parking lots of the world?


    Yes, a Ferrari is exclusive. It is a status symbol. There is a mystique in owning a Prancing Horse from Maranello. At some point you disappoint potential buyers who will never come back to the brand because of the current practices.


    Die-hard Ferrari fans won’t care; they will place their orders and wait. It is the new/future customer Ferrari should be interested in.


    That is a problem that can be fixed if Ferrari has the will to make changes. Four years is a long time to wait, especially if you may not know what the future model will even be.

 

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