talian sports car manufacturer Ferrari continues to post smart revenues, despite a cap on keeping production to under 7,000 cars per annum.
19 May 2014 | 3347 Views | By Autocar Pro News Desk
Italian sports car manufacturer Ferrari continues to post smart revenues, despite a cap on keeping production to under 7,000 cars per annum. Ferrari’s strategic decision to reduce its output in order to maintain its cars’ exclusivity and high residual value was taken in May last year.
Revenues grew by 12.5 ...
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Italian sports car manufacturer Ferrari continues to post smart revenues, despite a cap on keeping production to under 7,000 cars per annum. Ferrari’s strategic decision to reduce its output in order to maintain its cars’ exclusivity and high residual value was taken in May last year.
Revenues grew by 12.5 percent to 620 million euro (Rs 5,057 crore) despite a 6 percent drop in the number of road cars delivered: a total of 1,699 were sold, which is 100 cars less than last year. Net profits rose 5 percent to over 57 million euro (Rs 465 crore), while trading profit equalled last year’s 80 million euro.
The first quarter of 2014 also confirmed Ferrari’s ability to generate strong cash flows, with a net industrial financial position of 1,487 million euro (Rs 12,130 crore) as on March 31. This is the highest ever in the Maranello-based manufacturer’s history, with growth practically doubling over the past two years.
During at the board meeting held on May 16, chairman Luca di Montezemolo said: “We want to keep total production of the cars in our range under the 7,000 mark once again this year whilst strengthening our economic results. This target poses an even greater challenge in the light of the very substantial investments we are making in both our product and Formula One where an exceptional effort, financially as well, is required to bridge the gap with our competitors.”
Demand in the US remained high and despite deliveries being restricted, it saw 8 percent growth with 494 Ferraris sent across the Atlantic. Sales in the Middle East were up 6 percent with 150 deliveries and in the Far East, sales in Japan almost doubled with 128 cars delivered, 57 more than in Q1, 2013. China, which saw sales of 73 cars, posted an increase of 4 percent.
In Europe, the United Kingdom retained its position as the continent’s leading market for Ferrari with 168 cars delivered (+3%). Meanwhile, after months of negative results, sales rose Italy: 63 cars were delivered, an increase of 13 percent. However, on an annual basis, it is expected that the domestic market will remain marginal, accounting for less than 3 percent of total deliveries. In Germany, the carmaker recorded a slight drop in demand in Germany where 162 vehicles were delivered (around 30 less than last year) in line with the decision to limit the number of cars sent to more mature markets as well as the end of the California’s lifecycle.
In Q1, 2014, Ferrari’s brand activities (licensing, retail, e-commerce) saw a 19 percent advance in direct retail revenues with e-commerce up by 10 percent. Several important new licencing agreements were also signed in the early months of the year, including one for the building of the Ferrari Land theme park in Spain and another with the world-leading eyewear company, Oakley, for an eyewear range and sponsorship of Scuderia Ferrari.
Ferrari, which says it will make significant investments in digital media in 2014, was earlier this year, once again, voted as the world's most powerful brand in the 2014 Brand Finance Global 500. The carmaker scored highly on a wide variety of measures on Brand Finance’s Brand Strength Index, from desirability, loyalty and consumer sentiment to visual identity, online presence and employee satisfaction.