Ferrari (NYSE:RACE), “We proved our F1 power unit was legal”

Ferrari (NYSE:RACE), “We proved our F1 power unit was legal”

$RACE

After a series of FIA checks, rule clarifications and accusations from rival teams, Ferrari (NYSE:RACE) is confident it has proved its power unit was legal in Y 2019.

The iconic Italian team enjoyed a significant straight-line speed advantage over its rivals all year, leading to speculation over the way it was running its engine.

F1’s power unit regulations are relatively mature, and as a result, there was a degree of surprise and suspicion when Ferrari gained a clear advantage over the other 3 manufacturers: Mercedes, Renault and Honda.

Accusations peaked at the US Grand Prix when Ferrari suddenly struggled for performance just days after racing’s governing body, the FIA, issued a TD (Technical Directive) that ruled out certain ways of increasing fuel flow beyond the permitted amount. The theory was that Ferrari needed to adapt the way it ran its power unit to abide by the FIA clarification, and after the race Red Bull Racing driver Max Verstappen went as far as accusing the team of “cheating” at previous rounds.

Ferrari denied it made changes to the way it ran its engine in Austin, Texas, but the FIA continued to investigate its fuel system and seized parts from the car after the next round in Brazil. Extensive investigations followed at the FIA’s headquarters, but nothing illegal was found on the car.

Speaking at a recent media event in Maranello, Italy, team principal Mattia Binotto addressed the speculation, saying the depth of the FIA’s investigation would have rooted out any foul play.

“If I look at the whole season, we have been one of the most-checked teams — both before and after the TD had been worked up,” he said. “And when you have got a performance advantage, and certainly we had it for the whole season, because we’ve had a power advantage compared to our competitors since the 1st race — being checked is normal and it is somehow good because through the checks you are proving your legality after the TD has been issued.

The number of checks on our cars have multiplied, the results have been shown to the FIA and the details have been discussed. So whatever could have been done through collaboration with the FIA has been done.

“We have never changed our way of operating the engine for the last part of the season, showing that our power unit is fully legal. Had that not been the case, if there would have been any non-legality, it would have come out at the very 1st check.”

Boss Binotto added that Ferrari had faced a huge performance deficit to MercedesAMG in Y 2014, when the current engine regulations were introduced, and had been working hard to close the gap before it gained an advantage. He pointed out that questions over MercedesAMG engine had been raised in recent years and, much like they have been this year, Technical Directives were issued to close loopholes.

I have to admit that in the first year of hybrid formula we were down on horsepower,” he said. “Back then it was simply a matter of clarifications, a matter of addressing even further the regulations, more TDs and more discussions. But that’s exactly what can happen in F1 when you have a competitive advantage.

“I remember, in 2014, we had a big gap to Mercedes, which I remember was above 80 horsepower at the time and we recognised it. We put a lot of effort and investment into our power unit to try to address it and to improve.

And today we have got a smaller advantage compared to what they had at the time, and simply because we worked very hard as a team. I think I am somehow very happy for what we achieved.”

Speaking at the same media event, Ferrari CEO Louis Camilleri, who was clearly frustrated by the accusations, underlined the importance of compliance for a company that is listed on the NYSE.

Ferrari is a public company and it’s known worldwide integrity and compliance is Key,” he said. “I think people need to factor that in when they try to look at these allegations which have grown as the months evolved, stronger and stronger.

Ferrari is the Aristocrat of the automotive sector.

Enzo Ferrari’s iconic Italian Supercar manufacturer claimed the title according to the latest Brand Finance Global 500 2019 report launched at the World Economic Forum in Davos.

HeffX-LTN overall technical outlook for RACE is Very Bullish, overhead resistance is 170.04, and Key support at 164.96, a Key indicators is Very Bullish and the stock has established long term support ahead of this breakout.

Ferrari finished at 167.43, + 2.18 Tuesday in NY.

Ferrari will continue to create value in the long term. Ferrari is a quality 1st long term luxury products investment, and I see it at 200+/share in that frame.

Ferrari will continue to create value in the long term. Ferrari is a quality 1st long term luxury products investment, and I see it at 200+/share in that frame.

Stay tuned…

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