Fiat sells Ferrari. Wait, what?

[Ciro Pabón]

Fiat announced yesterday that it will spin off Ferrari.

Ten percent of shares will be traded publicly. What could possibly go wrong?

1. Ferrari SUV.

Ermagehrd. Not to alarm anyone, but if Porsche did it (and it's bagging money by the sh1tload!) I guess that a "privatized" Ferrari would be the end of the Cavallino Rampante savoir faire.

Porsche Cayenne. Kill it! Kill it with fire!


Soccer moms driving a Ferrari? Well, Alonso says the current F1 car classifies for the task, so...

2. Goodbye, blue sky

Could (ehem, take a seat before reading this) Ferrari leave Formula One? Well, frankly, Ferrari has had horrible stints in the circus, at least that's what old timers like me think.

Yeah, I'm as old as the hills. I'm almost as old as Xpensive and Autogyro.

Nah, I'm just joking. Nobody can be as old as them and still be alive, but, hey, I'm not that far. Just in case, I remember when they faked those Ferraris (yeah, I know, you will pretend I made a mistake. Dream on).

The year without a Ferrari: 1956. They walk like a Ferrari, they swim like a Ferrari, they quack like a Ferrari... but they're Lancias


3. Revenge of the Nerds

If Ferrari is for sale, well, this means (duh) that anyone can buy it. Thus, manufacturers like Tata could buy it.

For example, Caterham (hahaha)


Heck, even McLaren could (if they decide to have two different kinds of bad cars racing around the track). Kickstarter anyone?

4. Electric Ferraris

Well, you have to abide by fuel efficiency rules and regulations. Up to this day Ferrari has been able to sell fuel hogs because they're lumped with FIAT. If Ferrari has to stand alone, this means they will sell economy engines.

Cox could revive some models for Ferrari


Man, do I miss the nitromethane smell in the morning!

Well, that's all I have in my bag. Apparently, shares reacted wildly. This is NOT good: usually this happens when investors (aka "vampires") see that the milk farm is selling the cows, thus producing a lot of "profit" (that is, liquidating accumulated capital). However, this could be a new era for Ferarri, who knows. Anyway, bye Montezemolo, hello American Ferrari!

We love our new Ferrari car! Specially the dog...


What else do you think will change?

[hpras]

American Ferrari you say??

[g-force_addict]

Fiat announced yesterday that it will spin off Ferrari.

Ten percent of shares will be traded publicly. What could possibly go wrong?

Is Ferrari actually profitable?
With VW losing money on every Bugatti Veyron, Toyota losing on every Lexus LFA and creative accounting it is hard to know.
Is FIAT profitable?
Ferrari would be the perfect smokescreen for a Madoff or Enron like crook to borrow or rise money for a Ponzi shceme.

Don't get me wrong. I'm not bashing Ferrari at least not their cars but who knows about their management.

Well, you have to abide by fuel efficiency rules and regulations. Up to this day Ferrari has been able to sell fuel hogs because they're lumped with FIAT. If Ferrari has to stand alone, this means they will sell economy engines.

Ferrari, Lamborghini and the like will continue to build gas guzzlers. And they should.
They need to lobby ASAP to agree to pay EU and USA a $50k or so fuel consumption fine for every car they sell there so they won't ban their cars altogether.
Such move would also keep redneck 'sport cars' like the Corvette, V8 Camaros and Mustangs out of the market.

[langwadt]

Fiat announced yesterday that it will spin off Ferrari.

Ten percent of shares will be traded publicly. What could possibly go wrong?

Is Ferrari actually profitable?
With VW losing money on every Bugatti Veyron, Toyota losing on every Lexus LFA and creative accounting it is hard to know.
Is FIAT profitable?
Ferrari would be the perfect smokescreen for a Madoff or Enron like crook to borrow or rise money for a Ponzi shceme.

Don't get me wrong. I'm not bashing Ferrari at least not their cars but who knows about their management.

Well, you have to abide by fuel efficiency rules and regulations. Up to this day Ferrari has been able to sell fuel hogs because they're lumped with FIAT. If Ferrari has to stand alone, this means they will sell economy engines.

Ferrari, Lamborghini and the like will continue to build gas guzzlers. And they should.
They need to lobby ASAP to agree to pay EU and USA a $50k or so fuel consumption fine for every car they sell there so they won't ban their cars altogether.
Such move would also keep redneck 'sport cars' like the Corvette, V8 Camaros and Mustangs out of the market.

There is already penalties for too high an average fuel consumption for a manufacturers fleet of cars,
Porsche makes gas gusslers but it is offset by VW eco boxes
Ferrari makes gas gusslers but it is offset by Fiat eco boxes

Making 10% public just means a free loan

[acosmichippo]

American Ferrari you say??

http://drawingforkids.org/images/23266- ... -truck.jpg

Looks more like an aussie Ferrari.

[g-force_addict]

There is already penalties for too high an average fuel consumption for a manufacturers fleet of cars,
Porsche makes gas gusslers but it is offset by VW eco boxes
Ferrari makes gas gusslers but it is offset by Fiat eco boxes

Let's say Ferrari, Lamborghini, Porsche or something misses the required Corporate Average Fuel Economy by 10 mpg.
'If the average fuel economy of a manufacturer's annual fleet of vehicle production falls below the defined standard, the manufacturer must pay a penalty, currently $5.50 USD per 0.1 mpg under the standard, multiplied by the manufacturer's total production for the U.S. domestic market'
http://en.wikipedia.org/wiki/Corporate_ ... el_Economy
That is $550 for every car sold in the US. Peanuts for a Ferrari owner. They could increase it 10 times (to $5.5k) and it is still less than the amount owners spend on options personalizing the car.

There's also the gas guzzler tax
http://en.wikipedia.org/wiki/Energy_Tax ... uzzler_Tax
Up to $7700. Again peanuts for new Ferrari buyers. Not so for V-8 Camaros and Mustangs.

The BIG problem is that the gov't should invest all these tax proceedings in reforestation or clean energy programs and not waste it in wars and welfare kings and queens.


Does anyone know about Europe?
Can gas guzzlers still pay fines or taxes without any limitations on the number of cars they can sell?

[langwadt]

There is already penalties for too high an average fuel consumption for a manufacturers fleet of cars,
Porsche makes gas gusslers but it is offset by VW eco boxes
Ferrari makes gas gusslers but it is offset by Fiat eco boxes

Let's say Ferrari, Lamborghini, Porsche or something misses the required Corporate Average Fuel Economy by 10 mpg.
'If the average fuel economy of a manufacturer's annual fleet of vehicle production falls below the defined standard, the manufacturer must pay a penalty, currently $5.50 USD per 0.1 mpg under the standard, multiplied by the manufacturer's total production for the U.S. domestic market'
http://en.wikipedia.org/wiki/Corporate_ ... el_Economy
That is $550 for every car sold in the US. Peanuts for a Ferrari owner. They could increase it 10 times (to $5.5k) and it is still less than the amount owners spend on options personalizing the car.

There's also the gas guzzler tax
http://en.wikipedia.org/wiki/Energy_Tax ... uzzler_Tax
Up to $7700. Again peanuts for new Ferrari buyers. Not so for V-8 Camaros and Mustangs.

The BIG problem is that the gov't should invest all these tax proceedings in reforestation or clean energy programs and not waste it in wars and welfare kings and queens.


Does anyone know about Europe?
Can gas guzzlers still pay fines or taxes without any limitations on the number of cars they can sell?

from:http://ec.europa.eu/clima/policies/tran ... dex_en.htm

Penalty payments for excess emissions

If the average CO2 emissions of a manufacturer's fleet exceed its limit value in any year from 2012, the manufacturer has to pay an excess emissions premium for each car registered. This premium amounts to €5 for the first g/km of exceedance, €15 for the second g/km, €25 for the third g/km, and €95 for each subsequent g/km. From 2019, the cost will be €95 from the first gram of exceedance onwards.

here there's an annual "green tax" determined by the rated km/l, max is about 1400€ at < 4.5km/l

which is kinda stupid, if you have gas gussling Ferrari you take for spin every other sunday in the summer you have
to pay 1400€ tax, if you have an eco box that does 20km/l and do 200km every day for work you only pay ~40€

[MOWOG]

Luca DiMontezemolo was the champion of preserving the cachet of the Ferrari brand. His plan? Keep production low and prices high.

Marchionne jettisoned him because as Il Patrone he obviously wants to reverse that formula. His plan is to leverage the brand to make lots and lots of money for Fiat and for himself.

For instance, according to the Wall Street Journal, Sergio sold a bunch of Fiat Chrysler stock the day AFTER he announced the Ferrari IPO. By doing so, his Fiat stock was worth 6.2 million Euro MORE than it was the day before. Talk about insider trading!

For sure, Ferrari is going to go the Porsche route. I don't think they will ever be as plentiful as Kias, but there will definitely be more of them than there are today. The brand expansion has obviously been phenomenally successful for Porsche. But will it work for Ferrari too? We will have to wait and see.

In the meantime, Sergio, I have two words for you. Are you listening, Sergio? Two words..........



New Coke.

In the meantime, consider this:

[santos]

The biggest shareholders will continue to be the Agnelli family. Fiat won't get rid of Ferrari.
I don't belive their going to start making suv's or family cars. .

[SidSidney]

Is Ferrari actually profitable?

Ferrari results are reported in the Luxury Car segment of Fiat Chrysler Group annual accounts. The Ferrari results include road car sales and whatever they make/spend on F1 - F1 is effectively a marketing cost of that business line.



So:-

a) Yes they are profitable, 364M EUR positive in 2013
b) 15.5% EBIT is respectable but not stellar for luxury - LVMH makes over 20% EBIT for example. I am completely certain the F1 operation drags that profit result down.
c) The average revenue derived from selling a new Ferrari road car is 333K EUR, about 420K USD. Average.

I wondered actually when looking at the numbers, if Ferrari is really a luxury brand. They are very mass market in some respects. Exclusive certainly, by dint of pricing policy and limited numbers, but luxury? I don't know, I think they display some mass market characteristics like the cheap-looking fan shops, some of the more silly brand extensions. It is a bit of a mixed message sometimes.

Valuation on that? Probably 15 x trailing EBIT is reasonable, with means 5.5 billion EUR. When you factor in the rarity value - there is only one Ferrari - the fact that they sell just 10% publically and the kudos of owning Ferrari shares on the first day, it could easily be worth 10 billion EUR or much more, especially in a toppy market like just now.

[AliRaza]

Nah, I'm just joking. Nobody can be as old as them and still be alive, but, hey, I'm not that far. Just in case, I remember when they faked those Ferraris (yeah, I know, you will pretend I made a mistake. Dream on).

[J.A.W.]

American Ferrari you say??

http://drawingforkids.org/images/23266- ... -truck.jpg

Looks more like an aussie Ferrari.

Aussie "Utes" are a bit more stylish than a bloody wellside "pick-up" mate..
Think El Camino in SS454 form, 'stead of good ol' redneck machines such as Uncle Jesse gots a likin' fo'..