Ferrari (NYSE:RACE) Yes to FUV, No to Dino 3.0

Ferrari (NYSE:RACE) Yes to FUV, No to Dino 3.0

Ferrari (NYSE:RACE) Yes to FUV, No to Dino 3.0


Next year, 2018, marks the 50th anni for Ferrari’s V6-engined Dino, an entry-level ‘slot car’ that never wore the Ferrari badge.

Notably, I owned the 1st 206 and the 1st 246 Dino’s in America. They were fun cars, they were Fiat’s not Ferraris.

Now with challenging regulatory environments and emissions targets to meet, Y 2018 would seem like the right time to resurrect the Dino name and concept.

Yet, it appears more likely Ferrari will look to burst through its 10,000-unit annual production barrier with an FUV, rather than a Dino that is being reported in some Euro mags.

And such a car would likely be priced 20% below the current entry-level Ferrari, the California T MSRP stickered at $202,723.

“We need to explore ways to attract customers to traditional values of the brand such as style, performance and engine sound before downgrading the entry level price for the brand,” Ferrari CEO Sergio Marchionne told analysts.

It has been about 12 years since Mr. Marchionne seemed certain that a Dino revival was a sure thing. In Y 2005, only the timing was the Question.

But, then due to divergent plans in Ferrari’s C-Suite, former long time Ferrari chief Luca di Montezemolo persistently rejected the defunct Dino’s revival.

Now in Y 2017 CEO Marchionne indicated the Dino is not relevant in the company’s plans.

The Dino would be an attempt by Ferrari to attract younger buyers, but Mr. Marchionne already describes Ferrari’s burgeoning Asian buyer base as, “phenomenally young.”

And the FUV is going to be responsible for bring lots more money to Ferrari’s bottom lines; revenue and EPS (earnings per share).

Globally, Ferrari sold a record 8,014 new vehicles in Y 2016, representing 5% Y-Y growth and enough production for the company to earn $432-M in net profit

According to my data, US Ferrari sales are up 5% to 1,421 units through Y 2017’s 1st 7 months, more than 2X Lamborghini’s total.

But, if a Dino is set to join the almost-certain FUV in extending Ferrari’s lineup is a decision Ferrari will announce  in Q-1 of Y 2018 with the revealing of its new 5 year plan. And practically speaking entering SUV sector is likely enough of a change for Ferrari’s loyal clienti for the time being.

Ferrari’s shares are trading at all time highs, and an lower priced entry level almost Supercar will not drive the price higher.

I expect that the FUV will price at North of $340,000 in the US with a 26% margin and no discounting.

Ferrari shares finished in NY at 108.67 on Thursday.

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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