Looking for Ferrari’s lost spark

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Looking for Ferrari’s lost spark

 

A Ferrari 458 Speciale A is displayed at the Paris Mondial de l’Automobile on October 2. Ferrari has fallen out of Interbrand’s annual list of the wor

By Eric Sylvers , 11 oct 2014

Dow Jones

Adding insult to broken motors and second-tier finishes, Ferrari has fallen out of Interbrand’s annual list of the world’s 100 most valuable global brands.

The Ferrari brand clocked in at a value of $4bn last year, good enough for 98th place. But the past 12 months have been a period of starkly contrasting fortunes, chiaroscuro you might say, for the Italian Formula 1 racing icon that doubles as a maker of million-dollar super cars that can go 0-60 miles per hour in 3 seconds.

The Maranello-based company reported its best ever financial results in the first half of 2014 and is on course to do the same for all of 2014.

On the racing track, it’s all rather different. The once dominant force in F1 has found it increasingly difficult to make its way onto the podium yet alone win a race. Ferrari has no victories this season and only two top-three finishes, results that weighed on the ranking Interbrand released earlier this week.

Ferrari tried to give its fortunes a jolt when it sent Stefano Domenicali, the team principal, packing in April. When that failed to change things and the poor F1 results continued to mount, fans and investors began to expect if not demand action. Ferrari is majority-owned by Fiat Chrysler Automobiles.

But nobody was quite imagining the axe would fall on Luca Cordero di Montezemolo, who for 23 years as chairman of the company has been the flesh and blood embodiment of Ferrari. Citing the poor performance on the track, while noting the record setting financial results, Sergio Marchionne, Fiat’s chief executive, ousted Montezemolo last month and took the Ferrari chairmanship for himself.

Now the automotive industry has its gaze fixed on Marchionne, hungry for any hint of what he plans for the injured Ferrari.

Montezemolo favoured keeping Ferrari’s yearly production at about 7,000 vehicles to ensure the product’s exclusivity, especially in the used car market. Marchionne has indicated he wants a gradual increase in production to be spread over several years though recently he has given hints that he might not rush to implement that. An initial public offering, which would put a value on Ferrari the company, is something that Marchionne has ruled out for now.

In its annual brand parade, Interbrand considers the financial performance of the branded product, the role the brand plays in influencing customer choice and the brand’s ability to command a premium price or secure earnings for the company.

Luxury auto brands still high on the marketing group’s chart include Mercedez-Benz, whose team is dominating this year’s F1 championship, in 10th place, with BMW in 11th. Porsche, owned by Volkswagen AG, was in 60th position.

If there is a silver lining for Ferrari failing to measure up on to some of its luxury rivals on those measures, it might be found in the knowledge that local super car rival Lamborghini is also absent from the Interbrand top 100.

But it is a victory at Sunday’s Russian Grand Prix that might help clear the clouds.

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