Ferrari said its new production line didn’t signal a change in its long-established policy of never making quite enough snarling, howling, beguiling sports cars for the super-rich to satisfy demand.
Ferrari made clear to investors attending the opening of a new facility at its Maranello, Italy headquarters that it was to make its first electric car, which won’t snarl or howl but will almost certainly beguile its traditional clients. Ferrari said the extension would add an additional production line to improve production efficiency not increase output drastically.
Reports said the price of the new electric car would be at least €500,000 ($535,000) and would carry on the tradition of huge profits per car.
At the unveiling of the new facility, said to have cost about €200 million ($214 million), Ferrari management was at pains to deny a Reuters’ report that this would allow annual sales to reach around 20,000, up from 2023’s 14,000.
“More money per car basically. We want to grow the company but not because we increase volumes. We want to have more tools, technology, more flexibility to accomodate the need of more personalization of our clients,” CEO Benedetto Vigna said, according to Automotive News Europe.
“This building will allow us to shorten time to market or product development time,” Vigna said.
Ferrari’s first electric car will be launched in the fourth quarter of 2025, and the new production facility will allow the company to produce a range of pure gasoline, gasoline hybrids, plug-in hybrids, and soon all-electric.
Investment researcher Jefferies said Ferrari will be able to make its own electric components and mix the production across ICE/hybrid/electric.
In its results for the first quarter of 2024, Ferrari said the mix was close to 50/50 ICE/hybrid even then.
At the official opening of the new factory extension, the company was anxious to kill the idea that more production was on the cards.
“Management was adamant that the strategic focus remains on driving the quality of revenues rather than the overall units shipped,” Jefferies said in a report.
“The production of limited-edition models will be more easily accommodated within the broader manufacturing site, helping to speed up new model developments,” Jefferies said.
Bernstein Research liked that it saw.
“What we saw was the sheer scale and determination of Ferrari to future proof its business fundamentals rather than an intention to meaningfully increase production in the near term,” Bernstein Research said in a report.
In the first quarter Ferrari reported first-quarter earnings 13% higher than the same period last year, but shipments were flat following a 20% fall in China. This prompted a 6-1/2% drop in the share price to around €374, which has climbed back to €396 Tuesday. The stock has been on a strong upward movement this year from a low of about €306 in late January.
Ferrari reported adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 13% to €605 million ($656 million) in line with analyst’s expectations. Ferrari’s EBITDA guidance for the year was unchanged.
Ferrari EBITDA last year rose to €2.28 billion ($2.45 billion) and it said three months ago it expects this to rise to €2.45 billion this year. Ferrari sees sales worth over €6.4 billion this year with adjusted EBITDA margins above 38%.
In 2023 Ferrari increased global sales to 13,663, boosted by the introduction of the four-door Purosangue SUV. The model momentum in 2024 is expected to be led by the Purosangue, likely to reach 18% of sales. Ferrari has set a 20% peak for sales of the Purosangue to make sure it doesn’t become overdependent on an SUV.
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