Posted on May 5, 2016.
Fiat Chrysler boss Sergio Marchionne has further tightened his grip on Ferrari. Having ousted the previous chairman Luca Montezemolo in 2014 he has now nominated himself as CEO in replacement for Amedeo Felisa whose retirement has been announced. Here is The Wall Street Journal’s take on the move in an article written by Anne Steele:
Fiat Chrysler Automobiles NV Chief Executive Sergio Marchionne is also taking the wheel at Ferrari NV, a move that gives him charge over the luxury sports car maker his company spun off less than a year ago.
The widely anticipated move comes as Mr. Marchionne looks to find a partner for Fiat Chrysler. Formed as a merger that began while the U.S. unit was in bankruptcy, Fiat Chrysler is growing in the U.S. on the strength of its Jeep sport-utility vehicle and Ram truck brands, but it continues to struggle in passenger cars.
Mr. Marchionne, who replaces Amedeo Felisa at Ferrari, has been Fiat’s leader for more than a decade, and decided to carve out Ferrari as a separate company in 2014. Shares of Ferrari recently traded at $44.48 in New York on Monday, down 3%; its $8.4 billion market value only slightly trails the $10.6 billion investors assign to Fiat Chrysler.
Ferrari said profit grew 20% in its most recent quarter. The Maranello, Italy-based company posted a profit of €78 million ($89.8 million), or 41 European cents a share, up from €65 million, or 34 European cents a share, a year earlier. Revenue rose 8.8% to €675 million.
Ferrari sold 1,882 cars in the quarter, up 15% from the period a year ago. The vehicles sell on average for about €250,000 apiece. Fiat Chrysler, meanwhile sold more than one million over the same period.
Founded in 1929 by Enzo Ferrari, the sports-car maker had for decades been a part of the Fiat empire. Its slim production, traditionally capped at about 7,000 vehicles annually, and high-performance engineering have allowed executives to charge some of the highest sticker prices in the world.
Mr. Marchionne has to work at maintaining the allure and exclusivity of Ferrari’s performance machines while trying to expand production amid a surge in demand in China and other emerging markets. In an era when many high-end sports-car brands are expanding—notably Porsche—Ferrari has employed rigid discipline when it comes to factory output. There has long been a deep waiting list for Ferraris.
The executive has said the best route for Ferrari “is to continue to preserve its uniqueness in an environment which is design to protect it from the contamination of a large mass market producer.” At the same time, he aims to better monetize the Ferrari image by expanding the brand’s use in consumer product areas, including clothing or theme parks.
Mr. Marchione has been successful at expanding Fiat Chrysler sales in recent years. In the U.S., the company has reported more than 70-consecutive months of sales growth. Jeep SUVs and Ram trucks have benefited from relatively low gas prices.
Still, the company’s vehicles have performed poorly in some influential quality reports from independent parties. While Fiat Chrysler significantly increased North American margins in the first quarter, it significantly trailed Ford Motor Co. in the closely watched U.S. profit chase.
