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by Gerhard Blske, Euro am Sonntag
I.In Formula 1, Ferrari is hopelessly lagging behind this season. The results are downright humiliating. Charles Leclerc and Sebastian Vettel are in 8th and 13th place in the drivers ‘standings, and in the constructors’ standings Ferrari is just 6th behind Renault after eleven of 17 races.
On the other hand, the legendary sports car brand is still in the fast lane at the stock exchange. Even the Corona crisis, which led to a seven-week production stop, barely slowed the pace. Sales fell by 48 percent to 1,389 vehicles in the second quarter, sales fell by 42.6 percent to 570.8 million euros and profits even collapsed by 95 percent to 8.9 million euros, bringing the margin to 24 .3 fell to four percent. But the order book is full and is growing by a double-digit percentage. The loss of production of 2,000 vehicles was partially compensated by extra shifts and working through the vacation month of August. The share price erased its dent in March and is approaching the historical high of 167.20 euros. The analysts at Goldman Sachs set a price target of 189 euros, expect a significant increase in deliveries and possibly an upward adjustment of profit expectations for 2021. CEO Louis Camilleri only had to lower the forecast marginally and expects a “good year 2021”.
15 new models are planned
Giuseppe Berta, car expert and economics professor at the renowned Bocconi University in Milan, describes the current results compared to uro on Sunday as “good: Ferrari is the only positive commitment from major shareholder Exor”. He added, “It’s one of the most famous brands in the world. The quality is very high, the margins are huge, and it’s more important to have high margins than high sales. You can’t produce enough.” Indeed, Ferrari is struggling to meet the high demand.
The sports car brand is planning a model fireworks display. A total of 15 new models are planned by 2022. Three of them were presented in the past few weeks. But an intimate company connoisseur, who prefers to remain anonymous, complains that most of them are not really new vehicles, but facelifts of existing models. Many retailers are therefore dissatisfied. He also refers to the performance of models from the past.
While the prices of vehicles from the pre-Fiat era (before 1969) rose significantly, they fell for newer models. The problem is that new models are less innovative than before and the exclusivity is dwindling due to higher production numbers. Many new models, including the just introduced super bolide Portofino M, the F8 Spider or the 812 GTS, are niche models. With the introduction of plug-in hybrids, such as the SF 90 or the Stradale, they are lagging behind. And the super SUV that has been announced for years and is now due to appear in 2022 is still missing. Competitors like Aston Martin have long had such a model on the street.
Investors are still crazy about Ferrari stocks. The brand is a status symbol. Speculative aspects may also play a role. But expert Berta warns against leaning back in view of the good economic results and the stock boom. “We have to act quickly, because the luxury car market is very, very good and Ferrari has to take advantage of that.” Allegedly, there are 18 million potential customers worldwide who are willing and able to pay a minimum price of 190,000 euros for a Ferrari. And Formula 1 is an important advertising platform for this market.
Aston Martin is on the attack
From Berta’s point of view, major shareholder Exor, who holds 22.9 percent of the capital and 32.7 percent of the voting rights and behind which the Fiat founding family Agnelli-Elkann is the majority, must intervene. Camilleri himself and Exor boss and Ferrari chairman John Elkann are looking for the culprits in the past: with ex-Fiat Chrysler boss and ex-Ferrari chairman Sergio Marchionne, who died in 2018 and is a kind of pillar saint in Italy, as well as with Luca Cordero di Montezemolo, also a former Ferrari chairman and the last president under whom the brand won the Formula 1 constructors’ championship in 2008. The fact that Elkann incriminated his foster father Marchionne of all people caused a sensation in Italy. Many observers are of the opinion that he is making it too easy for himself. After all, Ferrari drove for the world title in 2018, the year Marchionne died. The misery began in Marchionne’s final phase. But many respected technicians were also killed afterwards.
Business is still going well, but Ferrari may be running out of time. The luxury brand Aston Martin, which will compete in Formula 1 with the previous Ferrari driver Vettel next season, has great ambitions. The British want to reduce the production volume by 30 percent to 10,000 units, are striving for more exclusivity and have just launched the DBX, a luxury SUV.
In the meantime, Ferrari remains much more popular. Aston Martin came in the second quarter with 67.4 million euros to little more than a tenth of Ferrari sales and also showed a high loss of 99 million euros. And Aston Martin shares only cost a little more than a tenth of the value at the beginning of the year, while Ferrari has barely increased since then. When it comes to capitalization, Ferrari leads with almost 30 billion euros in a completely different dimension than its rival, which only comes to 1.4 billion euros.
Corona crisis and Formula 1 involvement are factors of uncertainty. However, the sports car manufacturer benefits from its strong brand, and profit margins are outstanding in the auto industry. The stock is therefore valued significantly higher than that of other car manufacturers. Because of Corona, the Italians have lowered their annual forecast. Analysts expect profits to grow by a good 30 percent in 2021. Not just for Ferraristi.
The British luxury brand is under great financial pressure. The share price shows that there is great uncertainty as to whether models like the Valkyrie Aston Martin supercar can come out of the red. The pandemic is causing the sales engine to stutter, sales will fall by around a third in 2020. Profits are therefore not in sight in the next few years either. Hold fans.
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