The Big Q: Is the Scuderia getting close to IndyCar racing?
Roger Penske revealed Wednesday that he as the new owner of IndyCar and the Indianapolis Motor Speedway is working to land Ferrari (NYSE:RACE) to become the series’ 3rd engine and chassis manufacturer.
“I have been personally championing, alongside IndyCar President Jay Frye, developing a process with Ferrari,” Mr. Penske said. “I had a call with them last week, and Jay has too.
“Have they made a decision? The answer is ‘not yet’, but they are definitely interested in coming.”
Earlier this year, F1 lowered its cap on team spending meant to help level the playing field from $175 to $145-M. Initially.
Ferrari threatening to take their iconic racing team away from F1 entirely, which they have walked back.
As it stands now the development leaves the company with a surplus of budget and people assets without a home, and team Boss Binotto said in May that it is looking into other high-profile racing series to enter.
“Ferrari feels a lot of social responsibility toward its employees, and we want to be sure that, for each of them, there will be a workplace in the future,” he said. “For this reason, we have started to evaluate alternative programs, and I can confirm that we are looking at IndyCar.”
Since last running in the 1952 Indy 500 race, Ferrari has hinted multiple times at making a return to the series. The most visible came in the mid-1980;s, when the company designed a car for CART, the Ferrari 637 and talked with Bobby Rahal, the 1986 Indy 500 champion.
IndyCar has been in search of a 3rd engine manufacturer to align with Honda and Chevy since the end of the Y 2012 season when Lotus exited. The pressure is on now to find the successor to Lotus as IndyCar plans to move toward a hybrid engine model in Y 2022.
The impediment facing Ferrari and IndyCar is the presumed desire by the team to produce their own chassis like they do in F1, rather than placing their engine inside a car built by fellow Italian auto manufacturer and longtime IndyCar partner Dallara, who has been the series’ sole chassis provider since Y 2009.
Penske Entertainment Corp. President/CEO Mark Miles said last month such compromise was unlikely.
But this week, Mr. Penske indicated Ferrari had already been in communication with IndyCar’s chassis manufacturer as they looked more deeply into a possible program.
“They have been to Dallara. We’ve given them the info they need, and they have high-level images,” said Mr. Penske, whose Penske Corp. owns Ilmor Engineering, a Chevy partner. “We have a great relationship with Chevy and know what it takes with cost, so we can give someone a real idea of all the gates they have to go through if they want to become an engine supplier and be very transparent.”
We wait, We see and will bring you the latest events as they happen.
Our overall technical outlook is Bullish in here, as all Key indicators are Bullish to Very Bullish as it approaches its all time highs at 179.21 marked on 18 February 2020.
Ferrari (NYSE:RACE) finished Thursday at 172.16, +0.22 in NY just shy of its all time highs.
The Maranello Outfit’s shares were raised to Buy from Hold at HSBC.
Ferrari will continue to create value in the long term. Ferrari is a quality 1st long term luxury products investment, and I have called it at it at 200+/share long term, adjusting it to 200/share short term (after the virus) and siding with BAML to 230 long term for now. The stock is now considered defensive in the sector.
Have a Happy Star Spangled Weekend, Keep the Faith!
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