Ferrari boss Sergio Marchionne on why change is needed at Maranello

Fiat Chrysler Automobiles (FCA) group chairman and new Ferrari chief Sergio Marchionne gave a press conference at the recent Paris Motor Show on the same day that outgoing Ferrari boss Luca di Montezemolo bade farewell at the Ferrari press conference.

This is a near-verbatim report transcribed from a recording of Marchionne’s comments on the future of Ferrari. Questions have been inserted to make the full transcript readable. Marchionne took over from Montezemolo on 13 October, the day before shares in FCA started trading on Wall Street.

Can we expect significant change at Ferrari with the arrival of you as chairman?
SM: I think Luca and the team have done a phenomenal job of building the road car division. If you look at the uniqueness of the product, if you look at what was revealed today [the 458 Speciale A] – I have an Enzo and from zero to 100kph it is fighting this new 458. We have made huge strides technically in the last 10 years.

Does that mean significant changes are needed?
SM: There is a tradition that can’t be interrupted by a change of chairmanship. The uniqueness of the brand and the uniqueness of the technical skills are at the core of what Ferrari is. 

Some critics fear that Ferrari may change too significantly…
SM: Just to clarify some of the gibberish that’s been going on in the press about trying to turn Ferrari into Lamborghini: even if we tried desperately, I don’t think we could!

So will the strategy change materially?
SM: It is absolutely clear that all Ferrari’s uniqueness, exclusivity and technical prowess must be preserved. So you’re not going to hear any significant deviation from the strategy that Luca put together.

How about exploiting Ferrari by selling engines or engineering services?
SM: The technical prowess of the brand needs to be preserved. I still think that there is a piece of Ferrari that may become available to a larger audience, but people may be buying engineering services and engines from them, as opposed to cars. 

Does that mean Ferrari branching out into other areas?
SM: Cars need to stay the domain of Ferrari and it needs to do it as it has been for the past 10 years.

What about the Formula 1 team?
SM: The issue about F1 is a more difficult question. I keep getting reminded that racing is not a science, that a number of factors influence performance, and then I go to Monza and see that the first six cars are not Ferrari or powered by a Ferrari engine, and my blood pressure just popped. 

So the poor performance of the F1 team is the main reason for change?
SM: If it happens once and happens twice, you wake up and maybe think there’s a better way to do this.

Ferrari last won a Formula 1 championship in 2008. Is that a problem?
SM: Ferrari since 2008 has been plagued by a number of mishaps, has lost a couple of championships – one at the last race. We have phenomenal drivers. Somehow, the chemistry of all this has not worked.

How important is fixing the F1 team?
SM: That continues to be my main objective in terms of Ferrari going forward. A non-winning Ferrari on the Formula 1 track is not Ferrari. I can live with periods of bad luck, but it cannot become a structural element of the brand.

Is that why new management is needed at Ferrari?
SM: We’ve got to kick some ass and we’ve got to do it quickly. It takes what it takes. We might screw up, but we’ve got nothing to lose, right? Let’s risk something.

Reports have suggested that Ferrari might increase production. Can you explain the position?
SM: I have outlined the financial implications if Ferrari went from 7,000 to 10,000 cars a year and the gradual progression of earnings and cashflow. For me to tell you today that we are going to sell 10,000 cars is nonsense. The plan we presented in May only had a forecast of 7000 cars and no more. We have built in no increase of volumes.

Increased production might affect second-hand car values…
SM: The real issue — the result of a joint effort between me and Luca — was to agree the right elements of exclusivity of Ferrari. This came out of the financial crisis of 2007-2008 and we choked off volumes so that we would never, ever create a glut of Ferraris in the second-hand market.

But what if demand goes up as global markets recover?
SM: If there’s a point in time where the population of high net worth individuals increases substantially, then I think we have an obligation not to choke supply. But that’s something that has to be based on empirical data.

How might this affect delivery waiting times?
SM: We cannot allow this to become in any shape or form an easily available product. People need to wait for some time to get their hands on a car, but if you wait 24 months for a Ferrari, you’ve waited too long. There’s a point where the wait is too long. I think that’s crazy.

How might that affect one-off, halo models? Would you increase the numbers, like LaFerrari?
SM: The LaFerrari sold out — 499 cars — as soon as it was announced. The F60 America [we showed] in California is already sold out. Ten on-offs, €2.5 million each (Rs 19.43 crore); they're all pre-sold. I can go down there and do all the bandwagon stuff, but commercially it’s already sold out. I’m not saying we should make 20, but I think we should make the product available. And it becomes a point where exclusivity goes too far. It’s no longer reachable. We’re in business to sell cars to people. We’ve got to make product available. There is not an absolute restriction.