Ferrari Must Stay Focused As It Prepares To “Go Public”
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Ferrari’s success was built on its attention to “our people, our products, our clients,” said former Chairman Luca di Montezemolo and it must remain focused on the client as it prepares to go public.
Former Ferrari Chairman Luca di Montezemolo, who stepped down from his post last September in a dust up with Fiat-Chrysler’s CEO, has a stern warning for his former employer as Fiat Chrysler Automobiles (NYSE:FCAU) prepares to spin off the exotic Supercar maker with a public stock offering.
Publicly traded companies are most offen pressured to put profits and sales volumes over the value of the products and customer satisfaction.
“I hope that the clients will remain more important than the analyst or the investor or the financial markets,” Mr. di Montezemolo said Thursday, just before he was inducted into the Automotive Hall of Fame in Detroit, MI.
Mr. di Montezemolo, next to founder Enzo Ferrari, is seen as the man most responsible for Ferrari’s success on the Formula 1 racetrack and its evolution into the world’s most recognizable brands.
Fiat Chrysler’s plan to spin off Ferrari into a standalone company is part of CEO Sergio Marchionne’s plans to generate cash to fund Fiat Chrysler’s 5-year growth plan.
Mr. Di Montezemolo left Ferrari in October after clashing with Mr. Marchionne over Ferrari’s racing program, its global growth strategy and the IPO plans. Mr. Marchionne has said Ferrari could sell as many as 10,000 cars per year without damaging its exclusivity compared with the 7,000 it sold last year. Mr. di Montezemolo vehemently disagreed and was sacked.
Ferrari, in its prospectus, said it plans to pursue “controlled growth in developed and emerging markets” by adding dealerships and expanding its licensing agreements as it protects the exclusive nature of the exotic sports cars it makes. It promised to retain exclusivity as a core part of its strategic plan.
Mr. di Montezemolo said Ferrari became a great company because of its dedication to “people, products and clients,” as well as its dedication to “exclusivity in terms of number of cars, exclusivity in terms of how you deal with the clients.”
That model may come under pressure from Wall Street when Ferrari is a publicly traded company.
“I hope that the client will remain the most important point of reference,” Mr. di Montezemolo said. “Because if not, it will be a big mistake. Because, I always say, ‘our people, our products, our clients.’ These are the Key elements.”
Mr. di Montezemolo also reflected on his induction into the Hall of Fame, his career achievements and his view as a director of Formula One group.
He told reporters, “I had a fantastic experience together with such unbelievable men like Enzo Ferrari. Then with legendary car designer Sergio Pininfarina we did many cars, many, many cars. I used to fight with him, fight in a nice way … we made in my opinion fantastic cars, and he has been the best designer in the world, in my opinion, for cars.”
On the Ferarri LaFerrari, a hybrid supercar that was limited to production of 499 cars he said, “What I like when I see LaFerrari is that it has had a fantastic success because we were very, very keen to maintain exclusivity to do far less cars than what the market demanded.”
On his induction into the Automotive Hall of Fame, he said, “I am very pleased because this prize is here. It is in the capital of the automotive world. When I was a kid, Detroit meant Ford, it meant General Motors. A prize like this is important because Enzo Ferrari got this and Sergio Pininfarina as a designer, and today myself. So it also is in the Hall of Fame, how the Ferrari community is represented.”
Ferrari is a unit of Fiat Chrysler Automobiles NV (NYSE:FCAU)
||31 July 2015
Note: Canadian symbols now end in .c i.e SYMB.C
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