- POSTED: 07 May 2014 06:30
Fiat Chrysler Automobiles will keep a lid on production of new Ferraris over the next five years despite huge demand in emerging markets like China.
DETROIT: Fiat Chrysler Automobiles will keep a lid on production of new Ferraris over the next five years despite huge demand in emerging markets like China, Fiat chief Sergio Marchionne said on Tuesday.
Marchionne said in Detroit that Ferrari sold 7,000 of its supercars in 2013 and expects to sell the same number in 2018.
While rising wealth in China and other emerging markets could sustain expanding Ferrari production to 10,000 units annually, Ferrari's management have agreed not to expand production for now.
"We want to keep production capped to preserve the brands uniqueness, while continuing to search for opportunities in emerging markets but maintain exclusivity in mature ones," said Marchionne.
At the same time, Marchionne said Ferrari will launch a new model every year, with a four-year life cycle for each new model.
It will launch special limited series targeting the wealthiest customers and broaden its "personalisation" of key models to boost Ferrari's profit margins.
"That's very good business for us," said Marchionne, adding Ferrari is also working at improving the disappointing performance of its Formula One racing team.
Marchionne was speaking at an all-day presentation of the strategy for the newly-merged Fiat Chrysler, parent of the iconic Italian racing machine.
Even though Fiat has been struggling in Europe, he dismissed any suggestion of selling Ferrari. Analysts have undervalued Ferrari's overall worth to its parent, he insisted.
Analysts put Ferrari's value at 3.4-5.5 billion euros ($4.7-7.7 billion), but Marchionne argued a more accurate valuation would be twice that.
Luxury goods companies usually sell for 9-12 times gross earnings, he said.
"All you have to do is do the math ... Remember that the next time you look at our balance sheet," he told analysts in Detroit.