In The Red Mist, A Moment of Clarity

"Groagun" (groagun) 09/12/2014 at 16:16 • Filed to: Ferrari Marchionne

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English translation: All that hard work, for nothing. I will be crowned King upon my death.

I wrote earlier this week about the goings on at Ferrari and what I believe to be the mistake of increasing production. I left plenty of room to be wrong, but rarely am I. !!!error: Indecipherable SUB-paragraph formatting!!!

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I'm doing this follow up piece after reading an article from carscoops.com that explained what Sergio Marchionne is about to do in regards to the production levels at Ferrari. !!!error: Indecipherable SUB-paragraph formatting!!!

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Well, I was right, at least when it came to predicting what he would do volume wise. The real question for all of us, the enthusiast crowd, is this: What does raising production to 10K vehicles a year, or a %42 increase mean for the brand moving forward and in the future?

What was really interesting about the CarScoops article was the comments from NG212 and bu11ish.

First off, it was so refreshing to not read some trolling garbage and to see two people with differing opinions, debate the merits of the views in an adult, constructive and complimentary way. Many on OPPO and Jalopnik could learn from this.

Both eloquently rolled out their opinions and thoughts and left room for the other to have his/hers without the usual chest thumping and shouting down we all have come accustomed to.

Second. both arguments have valid and solid bases from which to argue from. Quoting NG212 " I know this is a subject that elicits passions. The 7000 unit cap has been good for Ferrari. But I understand Marchionne's view. His point is just that if some rich guy in Indonesia wants a LaFerrari, it won't hurt rich guys in the UK or US or Japan who have LaFerraris. So it seems to me this will have more of an effect on the resale value of Ferraris than on the brand's overall mystique — which was forged through decades, and has never evaporated. Not even when their cars weren't great. "

And here in lies the problem with Marchionne's plan. Ferrari is what it is today for several reasons. One of those reasons is exclusivity. You may argue that that was a function of Enzo's desire to simply be a racing team and not a road car manufacturer but the simple fact remains, the brand has been and was until recently, an exclusive marque that only a handful could enjoy.

That is a good thing! The reason the 250GTO' s sell in the 10's of millions is for two reasons and two reasons only. First, they are just great cars, beautiful and fast, a 'drivers' dream. Second, there are only 39 of them, that's it!

Tell me that you think the LaFerrari or even the Enzo will reach those types of heights 40 to 50 years from now. I have no idea what our roads will look like and what the conditions for driving may be in 2054 or 2064 but I'm willing to bet that if you can even drive these cars on 'public' roads, their worth wont be anywhere near the value of the equivalent 250GTO of today.

Rarity, while it bothers us because we can't join the club, even if we had the cash, drives the desirability and 'want' factor through the roof. That is how you build brand equity and the either warm and fuzzy feeling in the groin or vicious and venomous hatred for said brand. Both are needed and essential and all contribute to the mystique and allure of the brand.

Really what Marchionne is doing is selling the value of Ferrari's 'tomorrow'. 'Tomorrow' being the noun in that sentence says that all of these moves to sell more cars today just hurts the brand in the future. Satisfy my needs now and sacrifice tomorrow.

Yes, Ferrari is snobby and exclusive, they don't care if you exist or not. They will take advantage of you all along the way. And you love it and can't wait to join the club. It's basic human emotion and response. The need to be a part of a private little club with invite only members, very non democratic and again we love it and that's what we really want, almost all of us.

By increasing production Marchionne, I believe, will hurt the brand and eventually devalue it. Or maybe not, my name isn't Kreskin, but simple economics 101 says that the more of something there is the less valuable it is.

It may take some time for this to play out but I think di Montezemolo will be proven right and his praises sung after he has driven into his last sunset. Long live the King?

dogisbadob > Groagun 09/12/2014 at 16:37

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It can't possibly hurt them more than the Mondial and 400i did—and they were made during Enzo's lifetime!

There are more F40's than there are F50's, Enzos, and LasFerraris TheFerraris combined, yet the F40 still has more prestige so to speak, and is still more iconic. And the resale value of the F40 has held. Even if there were 100,000 F40's on the road it wouldn't detract AT ALL!

Enzo wanted to fund his racing team, so if he had to increase production to do it, he would do it.

The Testarossa may have been overproduced (10k were made including the 512TR and F512M versions) yet it hasn't hurt Ferrari's image one bit.

And of course you can't forget about Lamborghini, whose cars are much easier to buy, has no racing heritage, and shares parts with Audis. None of this hurts their image at all, and it won't hurt Ferrari, either.

I have much more of an issue with that Godfather letter to deadmouse, the press ringers, no more GTS targa models, and dropping the gated manual than I have with increased Ferrari production.

The California was supposed to be a Maserati, and this STILL didn't have any negative effect! (Development costs got so high that it needed to be a Ferrari to make a profit)

Even if Chrysler added an automatic transmission and prancing horse to the Viper and doubled the price, they'd have a nice long waiting list for the 810 Viperelli.

JACU - I've got bonifides. > Groagun 09/13/2014 at 20:59

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Amazing!