MARANELLO, Italy -- Times are good at Ferrari. Last year, the Italian sports car maker had record global sales of 7,318 units, which is 50 percent more than when Luca Cordero di Montezemolo became CEO in 1991.
But Montezemolo, now the company's chairman, has not forgotten the tough times -- such as the 1993 economic crisis that caused Ferrari sales to fall to just 2,325 units. Back then, Ferrari was not nearly as diversified as it is now, which is why Montezemolo expects the automaker's financial gains to continue even if unit sales are static.
Montezemolo discussed his outlook for Ferrari during an interview at the automaker's headquarters with Automotive News Europe Editor Luca Ciferri.
Q: Will Ferrari improve this year on last year's sales record?
A: So far this year we are doing well. The new LaFerrari was sold out even before its public unveiling at the Geneva auto show. Despite this, my focus this year and in the years to come is not to grow volume but to increase the exclusivity of Ferrari. This protects our margins and residual values for our customers.
What is your targeted operating margin?
I want Ferrari to remain at around 15 percent as we had a 14.4 percent margin last year, and it was 14.1 percent in 2011. This will be challenging because we are facing an intensive investment program.
The LaFerrari is a completely new model whose innovative technologies will influence all our future models.
We are not in a hurry to renew our range, as our oldest model is the 2008-launched California, which was upgraded in 2011. Nevertheless, to renew five models is a titanic effort for a small company such as Ferrari.
What is the average life cycle at Ferrari?
Generally seven years -- on some models it is eight.
When your cheapest car, the California, starts at $201,290 in the United States, how do you plan to make Ferrari models more exclusive?
Our revenue per unit is growing thanks to a higher grade of options and to the expansion of our Tailor-Made customization program. On average, a customer adds options worth $33,000, which is 10 percent of the retail price. Another way to personalize a Ferrari is our Tailor-Made program, which adds $65,750 on average. This results in more personalized, more unique cars that keep a higher residual value over time.
Are classic cars also a growing business?
We have expanded our Ferrari Classiche workshop to restore and certify authenticity of our past models here in Maranello. We are also considering opening a subsidiary in the United States, probably in California.
The U.S. is our largest market not only in terms of annual sales but also when it comes to the total number of Ferrari models on the road. For some minor restorations, a workshop in California would save the significant cost of shipping the car back and forth to Maranello.
How important is your third profit center, the licensing business?
Last year licensing and merchandising contributed $66 million to our bottom line, and this unit continues to grow. We have more than 50 Ferrari retail stores around the world.
In May, we will open a completely refurbished store here in Maranello that is double the size of our original store.
How much of a revenue contribution does your theme park in Abu Dhabi provide? Do you plan a second theme park?
The Abu Dhabi park makes a significant contribution, which is included in our licensing revenue because we do not own it. Another theme park would be an interesting development, possibly in Asia. But let me add this:
Last year we had 250,000 visitors at our Galleria Ferrari museum here in Maranello, and this year we expect about 280,000. I'm still amazed by the number of people we are attracting to a city with a population of about 17,000 people.
