Are Ferrari and most other supercar makers immune to economic recession? That was the question that everyone wanted an answer to because the “just how bad is it?” gets answered when we financial figures.

Ferrari released this press statement verbatim on October 27:

“Maranello, October 27th, 2008 – The Board of Directors of Ferrari SpA met today under the chairmanship of Luca di Montezemolo, to examine the third quarter results. Ferrari recorded 450 million in revenues (up 22.3 percent year-over-year), and a trading profit of 79 million (17.6 percent of revenues), up 41.1 percent from the 56 million figure (15.2 percent of revenues) for Q3 2007.
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Few companies are as steeped in tradition and history as Aston Martin. Following the post-World War II buyout of Aston by Sir David Brown (of DB designation), the company opened a factory, Newport Pagnell, in 1954.

The facility has seen the almost all modern Astons pass through it’s door, but as of July 19, all Astons will be built at the new facility opened in 2003 in Gaydon, Warwickshire, England.

With the recent consortium buyout of Aston Martin, coupled with the upcoming sale of Land Rover/Jaguar, the factory’s future is uncertain. From a strategic perspective, Aston will be well served by their current factory, which produces DB9s and V8 Vantages. In the future it will produce the DBS, the successor to the now retiring Vanquish line.

Jaguar and Land Rover will likely also have to move their product elsewhere, but Jaguar could probably stand to cut some production as demand has waned in recent years, in part due to a very aged product line. Both the S-type and X-type are due for major overhauls, though the lack of success in the X-type may prompt its demise from the company altogether.

Enjoying paying US$3+ for that gallon of gas? Didn’t think so. But don’t worry the Middle Easterners are more than happy to sell your their pricey car juice. And they’ll use it to buy themselves a Ferrari! Super!

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Aston Martins, Ferraris, and Lamborghinis are selling like hot cakes in the land of sand, so get yours before the list gets too long…

Photo courtesy Ferrari.

In our most recent posting we pointed out that Aston Martin was integral to Ford’s Premier Auto Group, not just because it represented Ford’s presence in the supercar market, but because it was also profitable.

Profitability is something that once eluded supercar makers such as Aston, Ferrari, and Lamborghini, even Porsche at times. We noted that Aston Martin is, according to Ford, now a profitable unit. As Ford does not publish profitability for each of the PAG’s units, we will have to take their word for it, but we do know they sold over 5000 cars in 2006.

Take a look at Lamborghini, which according to the company, pretax profits rose to €18.1 million in 2006. That’s a 4.5-fold increase from 2005 when profits were only €4.4 million. CEO Stephan Winkelmann has said, “We have a complete model range, which is the youngest we’ve ever had. We are now a real car manufacturer.” While the “real-ness” of Lamborghini’s product line may be debatable, they do have 10-cylinder and 12-cylinder models, the Gallardo and Murciélago, respectively. Both models feature a coupe and roadster version.

Part of this increase has been due to higher demand and production. In 2000, Lamborghini produced just 1 car per day, but in 2006 they had ramped up to 13 per day. This figure is still more than a bit shy of Porsche, but respectable for considering competitor Pagani has said it will make only about 20 cars for the year.

Doing very simple math, without consideration for one time write offs/sales, we can note the following per car sales for 2006:

Manufacturer	Profit (pretax)	Production (# of cars produced)	Per car profit
Lamborghini	€ 18,000,000	2095	€ 8,591.89
Ferrari	€ 183,000,000	5671	€ 32,269.44
Aston Martin	N/A	5000	N/A
Porsche	€ 1,390,000,000	86426	€ 16,083.12

Porsche is the most profitable auto manufacturer in Europe, but per car averages put Ferrari impressively on top. Aston Martin and Pagani do not post numbers officially, but Aston reports a profit, however small that may be. Bottom-line, money CAN be made in supercars!

Sources:

Bloomberg http://quote.bloomberg.com/apps/news?pid=10000080&sid=aLQlMBk2X4yM
Lamborghini
Ferrari
http://www.automotoportal.com/article/ferrari-annual-report-2006-impressive-growth-in-revenues-and-profits
http://www.autoblog.com/2006/07/04/aston-martin-makes-a-profit
Aston Martin
http://business.timesonline.co.uk/tol/business/industry_sectors/engineering/article681820.ece
Porsche
http://www.iht.com/articles/2006/11/15/bloomberg/bxporsche.php

Our friends at Winding Road magazine recently spent the time and money to go to the Geneva Motor Show, one of the top motor shows in the world. Where there, they spotted the all-new Ford Mondeo.

We noted some months ago that Ford was opting not to sell their hot hatchback Ford Focus ST and Ford Focus RS in the USA, a market that craves large engines and fast cars. It is no wonder Ferrari’s number one market is the gas-guzzling American market. The Mondeo is no gas-guzzler. It is a well-designed and well-engineered family sedan, much like the Fusion in the American market. But make no mistake, it is most definitely not the Ford Fusion. What this represents is a poor marketing effort on the part of Ford Motor Company. It also signifies a synergy lost in a global company. Ford could save money by eliminating the Fusion and using the Mondeo in the USA. A smart move, but instead the company struggles and has to sell of its profitable Aston Martin division, and brand that did not fit into the streamlined strategy of the future Ford PAG.

The conclusion is that we should not be surprised about this ill-advised move considering they have brought back the Taurus name – a name synonymous with boring sedans.

Source:http://news.windingroad.com/countriesmarkets/euro/geneva-motor-show-ford-mondeo-launches-and-we-wish-it-was-our-fusion/

On Monday, Ford announced that they sold their profitable brand Aston Martin to a consortium of buyers, including the owner of racing competitor Prodrive of the UK. This means that Aston now goes back to British ownership – at least partly. In addition, a well-known Aston Martin collector is investing in the buyout as well as two well-financed investment companies Adeem Investment Co. and Investment Dar, both of Kuwait. Ford will retain US$ 77 million (about 8.5% of the company). The whole deal is worth $925 in much needed cash for Ford Motor Company. Ford will still retain three brands in its Premier Auto Group: Volvo, Land Rover, and Jaguar. Ford has previously stated that Jaguar is losing money, and Land Rover (despite widespread quality problems) is said to be profitable. Both are known “British” companies.

As for Aston, we can expect to see some leverage on the buy-side of this deal. It is unclear if the two Kuwaiti investment companies are planning long-term investments, but a lot of leverage could mean a quick turn-around. Unlikely would be for David Richards, the chairman and founder of Prodrive, and John Sinders an Aston collector and racing backer, to resell the company in the short-term. Both seem to view this as a long-term investment.

Strategically, Ulrich Bez will remain the CEO of Aston Martin, and will continue to drive the product lineup in the future with the Rapide, a four-door Aston Martin, which will compete against the Maserati Quattroporte and the Porsche Panamera (due out in 2009). We should expect that plans for the Rapide will be accelerated to generate more revenue and better return on investment over the next few years.

On a final note, for those surprised by the Prodrive investment, we should note that Prodrive has considered investment in a production vehicle before. The well-known racing company commissioned a technologically advanced vehicle, the Prodrive P2. Prodrive couldn’t be bothered to put the sophisticated car into production, but we could view the purchase of Aston Martin as a foray into production sports cars. No doubt we could see Prodrive technology in future Aston Martins, thus giving Aston a specific product advantage.

Source:http://media.ford.com/newsroom/release_display.cfm?release=25635