Ferrari (NYSE:RACE) Now Worth More Than Ever
$RACE, $TM, $F, $VLKAY, $HMC
Ferrari’s (NYSE:RACE) pre-IPO Chairman, Luca di Montezemolo, enforced a strict 7,000 vehicle production cap per year.
Raising that number, he cautioned, would dilute Ferrari’s brand and product value and weaken the company’s consumer alure.
Today, it is fair to say a fair to say that Luca, who many of us know personally for decades, has been proven wrong.
The Detroit Bureau, citing a recent study by Brand Finance, reports that since President Sergio Marchionne sacked him and increased production to 9,000 units annually, as well as managed a very successful IPO + the upcoming opening of Ferrari Land in Spain, and the Ferrari Land planning in the US, the brand’s commercial value has risen by 40% to $6.15-B.
That is just for this YTD, it is very impressive, especially for a car maker to the wealthy consumer only
To give you a better idea about this accomplishment, Toyota (NYSE:TM), currently the most valuable auto brand, increased its value by 7%, for a total worth of $46.3-B.
This is the point, a 40% rise on Ferrari’s part is Super.
Another automaker whose brand value surprisingly increased is Volkswagen (OTCMKT:VLKAY). The same study claims VW is “up by 32% to $25-B, a clear sign that its post diesel recovery is going well.
On the other hand, Chevrolet, Ford (NYSE:F), Honda (NYSE:HMC), Hyundai, and Nissan all declined in the Brand Finance rankings.
For you that do not understand Brand Strength: Brand Strengthis used to determine what proportion of a business’s revenue is contributed by the brand, which is projected into the perpetuity to determine the brand’s value.
For Ferrari, President Marchionne’s understanding that a 2,000-unit annual production increase would not hurt the brand overall has proven correct,
People want new Ferraris, and Ferrari seems to have found a better supply/demand balance, + the really rich want Classic and Vintage Ferraris as they are the world’s most expensive cars, and those in the Tier 1 class have increase on average of 10.5% compounded annually since 1995 according to the tracking data.
Notably: Ferrari shares are trading at all time highs.
|NYSE:RACE||65.67||23 February 2017||-0.21||66.43||66.57||65.64||391,400|
|HeffX-LTN Analysis for RACE:||Overall||Short||Intermediate||Long|
|Bullish (0.46)||Bullish (0.44)||Bullish (0.35)||Very Bullish (0.58)|