Is Ferrari’s aura enough to support the brand when it becomes independent? image

The Italian luxury supercar manufacturer is one of those iconic brands that transcend the particular industry where it activates. But for Ferrari, showing it can exist and flourish as a standalone company might be tougher than winning the Formula One championship ten years in a row.

Parent Fiat Chrysler Automobiles NV has announced it decided to allow Ferrari spin off as an independent company (although its shares would be mostly divided among FCA shareholders), a process that should be complete in 2015.

The global power of the Ferrari name is now adamant to the brand’s success, as the company would need to cope with the development costs of its cars alone – in the mean time also meeting the rising standards of its elite clients. So far, Ferrari’s internal production cap – with output limited at 7,000 units per year to maintain exclusivity – could become a huge handicap, as the industry often needs scale to survive.

The high-end market of cars that trade with six-digit figures has led Bentley, Lamborghini and Porsche to become Volkswagen AG subsidiaries; Rolls-Royce has also joined the German party – at BMW and struggling Aston Martin has reached out to Daimler for easy access to top of the line technology.

The Maranello, Italy-based company’s ace could be its brand power, with Brand Finance seeing it as the world’s “most powerful” – even ahead of Apple Inc. Ferrari boasts a loyal to fanatics customer (and fan) base and has huge margins.

Via Bloomberg

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