The Prancing Horse Needs a New Stable

2015 Ferrari F60 America

2015 Ferrari F60 America

Ferrari has always been a symbol of power, luxury and exclusivity. But what makes it more than a status car? And the answer to that is if you have to ask, you’ll never know. Be that as it may, the uber rich among you guys can now not only buy a Ferrari, you can buy The Ferrari. You heard us right, the luxury carmaker and quite possibly the best known car brand in the world is now on the market.

Ferrari has been part of Fiat since 1969, when it first acquired a 50% stake in Ferrari. Against the judgement of the CEO  Sergio Marchionne, Fiat has decided to sell their prominent company for some much needed financial relief. The aforementioned exclusivity comes at a price. Despite the market demand, Ferrari has resisted increasing the supply of their cars, selling fewer than 7000 cars a year. All things considered, it might be a good decision for the brand but definitely not the company as the latest circumstances have proved.

Down to the figures, Fiat Chrysler will be selling 80% of Ferrari’s shares to their shareholders, and the other 10% in an initial public offering. The rest of the 10% is owned by the founder Enzo Ferrari’s son – Piero Ferrari. Before we say anything more, let’s just take a moment to appreciate the sheer  FCA will be offering a hundred million new shares to the public in the next month. That’s an estimated $5.1 billion money that Fiat can pump into more profit making ventures.

2015 Ferrari 458 Speciale

2015 Ferrari 458 Speciale

Speculations over the new ownership has already begun. Will the separation prove crippling for the prancing horse, or will it soar higher than a quarter stallion. It is expected that Ferrari will continue it’s well formed path of staying in the game as a luxury brand, and not just a car manufacturer. Still, the biggest issue for Ferrari loyalists is that the new management can run Ferrari like any other company or maintain its historic heritage. On one hand, they will need to preserve the Ferrari tradition and on the other hand, a company is only as good as the profit it makes.

Down the road, the separated Ferrari might need some tie-up with the other major brands to continue its operations seamlessly. Although right now, it is not a major deal breaker since Ferrari has always been an individual sealed department.

F1 fans are perturbed too. Ferrari hasn’t won the championship since 2007, and there’s a tiny chance the stakeholders decide to chop down the seemingly dead limb – the racing division. But there’s something they might be forgetting, between 1979 to 2000 Ferrari didn’t take home the winning trophy once. That’s a 21 year long haul. Thrice that of the recent dry spell. The original intention of the founder  was to make cars for the sole purpose of racing and the reluctant decision to make cars for the posh public only introduced when Enzo needed funds to fund the races.

 

What would be ironical, and a cruel blow to Ferrari is if the company formed for the only reason to race shuts down its own racing division. The chances of of that are still slim, but it is still an ominous possibility. All these questions will be answered as deals surface. Hopefully sooner rather than later because the whole of the car community has this on their mind. Even so, the buzz has only just begun. Rest assured, we will keep you updated on the progress of the momentous events that are to follow.

2015 Ferrari California T

2015 Ferrari California T

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