This statistic shows the annual net revenue by business line for the Italian sports car manufacturer Ferrari from 2013 to 2018. The automotive and replacement parts business segment accounted for the majority of Ferrari’s annual revenue. As of 2018, the net profit from shipping cars and selling spare parts was approximately 2.5 billion euros, while the net profit from selling engines was 284 million euros.
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Ferrari makes the same amount of money selling one vehicle as Ford does selling 908: source
Ferrari far outpaces the competition in terms of the amount of profit it makes on each vehicle it sells.
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Although Ford vs. Ferrari may have been one of the most exciting car movies of 2019, there is really no comparison in the real world of the present. not in terms of financial gain, at least. According to a recent survey, the maker of supercars outperforms every other manufacturer in the world in terms of profits made per unit sold.
Ferrari made a sizable profit of $94,000 for each vehicle it sold in 2019, according to a research by Fiat Group World based on data supplied by manufacturers. BMW has to sell 30 cars to make the same amount of money as the legendary Italian brand, placing it far ahead of direct and indirect competitors. The numbers for Toyota (44), Volvo (45), Volkswagen (56), PSA (65) and Mercedes (67) also show how many units must be sold in order to match Ferrari’s revenue from the sale of only one vehicle. To match Ferrari’s profit margin from one unit, interestingly, Ford needs to sell 908 units while Japanese automaker Nissan needs to sell 926 units.
Beloved Brands author Graham Robertson
One of the most coveted luxury automobile brands in the world is Ferrari. Ferrari is a brand that Italians all over the world associate with their love of Italian culture. They make their money by actually selling fewer automobiles than other companies, who want to prove their worth by selling more. This is a fantastic case study for marketers looking to increase brand desire. Ferrari sells nearly as much goods as it does automobiles thanks to all the unfulfilled dreams. Ferrari has a solid grasp of its brand positioning.
When considering a target market, most marketers ask themselves, “What consumers do we want to get?,” but I ask, “Who wants us?”
The people you should bring in first should be the ones that are already driven. Utilize their enthusiasm to further ignite love for your brand.
When you have the most driven customers, you may appeal to their desires and create a close relationship with these brand devotees. You’ll observe how the link strengthens your brand’s ability to generate money.
This is the revenue generated by each vehicle sold by Ferrari.
According to a German study done by Dr. Ferdinand Dudenhoffer, a director of Automobile-Center Automotive Research situated in Duisburg, Germany, Ferrari, an Italian luxury sports car founded by Enzo Ferrari in 1939, produces an average of $80,000 every vehicle sold.
With that kind of money, you could purchase a Tesla Model X for $79,500 or a Mercedes-Benz C-Class for $73,500.
The price of a single Ferrari can range from roughly $200,000 to over $300,000. (much, much more for classic models sold at auction or limited edition cars).
In contrast, Porsche makes an estimated $17,250 profit for every car, according to Bloomberg, and BMW, Audi, and Mercedes each make an average of about $10,500 per car, according to Motor Authority. Porsche’s cars sell for between $50,000 and $150,000, with modified and auctioned models fetching even higher prices.
In 2017, Ferrari sold roughly 8,400 vehicles, and its market value is currently over $22.6 billion. The sports car manufacturer shipped 8,398 vehicles in 2017 compared to 8,014 in 2016 (an increase of 5%); the low supply helps to maintain the high car prices. Ferrari’s net profit for the first quarter of this year was $178 million, a 19% rise (Porsche produced 246,000 vehicles last year, for instance, which is a 4 percent increase from 2016).
Ferrari unveiled the brand-new Portofino model in February. Ferrari’s California T is being replaced with the convertible, V8 GT sports vehicle, which retails for $215,000. Marchionne revealed to Bloomberg TV in April that Ferrari is testing a brand-new electric vehicle. The company’s first-ever SUV will be powered by the gasoline-battery hybrid technology.
How much money is generated by Ferrari’s merchandise?
Every year, Ferrari generates sales revenue of about $4 billion, of which merchandise accounts for $2 billion. This includes everything from miniature vehicles, logoed hats, and flags to pricey luxury items like a PS3,500 leather trench coat. Although not my style, someone must be purchasing it.
All of this is reflected in how Ferrari is valued on the stock market in comparison to other well-known businesses. Investors are willing to pay a far higher premium for Team Red than they are for Ford or Volkswagen, which are currently valued at 2.8 times annual earnings and 4.71 times, respectively.
Let me use these prices to demonstrate my point: Dior is running at 20.3x, Hugo Boss is at 20.2x, and Louis Vuitton Moet Hennessey is running at 23.4x. far more similar to Ferrari than its auto “competitors”.
Michael Schumacher was one of the main motivators—pardon the pun—for the brand dominance. His successes behind the wheel throughout his reign as champion led to unfathomable goods sales, making him one of the largest and greatest sportsmen of all time.
Considering the Ferrari business strategy, despite the aforementioned, automobile sales are already catching up to their product sales. They no longer employ the 3-car configuration of a mid-engine, a front engine, and a hyper-car because of their break with design firm Pininfarina a few years ago. Instead, they now provide a wide range of cars at different pricing points, and they just announced the creation of their first SUV.
Simply put, more models translate into a larger consumer base and higher sales.
Ferrari has the ability to remain a mainstay of the auto industry for a very long time. Ferarri’s cars are selling more and more, and their business strategy is increasing.
Additionally, they have the luxury fashion division of their company to propel them into the future, give them flexibility, and help them stay one step ahead of the competition.
It would be amazing to witness them win the Formula 1 championship once more. Sainz recently earned his first victory at Silverstone, while Leclerc recently won his maiden race. Even if I support Red Bull, we are all secretly also Ferrari fanatics.
As a financial advisor, it is fascinating to observe the operation of these prosperous business models and draw inspiration for our cash management service. For brand case studies and other financial advice, see our blog.
What Do Ferrari Earn From Formula One?
Ferrari’s F1 team is thought to earn roughly $500 million annually from the sport overall. This supports the money they invest annually to remain competitive. A significant portion of that income comes from prize money (and other F1 payouts), but sponsorships still account for a greater portion.
The amount of money Ferrari makes from Formula One is not disclosed by the team, although many of the figures may be put together using data from other sources. Ferrari’s several F1 interests, including running their own two cars in addition to supplying their engines to other teams on the grid, further complicate matters.
The Ferrari F1 team probably broke even or turned a little profit in 2021. This is determined by other elite teams’ allegedly having similar financial outcomes, such as Mercedes and Red Bull. Even for the elite F1 teams, the sport’s worth is visibility and branding rather than just a means of generating money directly.
What Ferrari is primarily known for
It makes sense that some analysts are uncertain about Ferrari’s business practices. After all, since its IPO in 2015, Ferrari has grown significantly. Demand for its road cars is what has driven the stock’s 111% gain over the past year.
Ferrari, meanwhile, solely sells vehicles to support its racing program. That has always been the case since since former race car driver Enzo Ferrari made the decision to found the Scuderia Ferrari, a company that manufactures race cars. Due to the high cost of racing, Ferrari began producing “regular” vehicles to raise money for its most ardent endeavors.
That may sound as if Ferrari’s “customer,” as they are referred as, isn’t the company’s top priority. However, that is the situation as it stands, and the clients are content with it.
Today, the most prominent racing series in the world, Formula One, is still Ferrari’s primary focus. From the entry-level Portofino to the top-of-the-line La Ferrari, every vehicle Ferrari sells contributes to the racing effort. In fact, one could contend that anyone who purchases Ferrari stock is also supporting the team’s racing endeavors.
Additionally, investors are completely in the dark about the racing effort, which is like a top-secret black box. The F1 innovations are created in a huge, windowless red room at the Ferrari factory in Maranello, Italy; actually, it’s a red box. It’s the best representation of Ferrari’s true thinking that comes to mind.
While there is an all-electric series, Formula E, you go to see Ferraris race to listen to the roar. For spectators, racing is very much about sound. Ferrari had to confront whether the new machine would sound appropriate when it made the significant upgrade to a turbocharged V8 powerplant for its 488 supercar.
Does Ferrari generate a large profit?
Ferrari is still by far the most successful automaker out of all the brands. From 21.4 percent in 2020 to 25.5 percent in 2017, it saw a rise in operating margin. According to the data, the corporation will make a staggering $106,078 for each device sold in 2021. With $6,693 in revenue per vehicle, Tesla came in a very far second.
Felipe Munoz, the article’s author, works with JATO Dynamics as an automotive industry specialist.
What is the Ferrari business model?
Ferrari has much higher profit margins than conventional automakers. Perhaps this is due to the fact that they charge more for their cars than the VW group, Daimler, and Ford. Their merchandise, not their cars, is the main driver of this huge margin. Ferrari is considerably more similar to a designer brand like Louis Vuitton or GUCCI than it is to a car company like Ford or VW.
What is the annual revenue of Ferrari?
Between the fiscal years 2020 and 2021, Ferrari’s global net revenue climbed by roughly 811 million euros. In the fiscal year 2021, the luxury vehicle manufacturer with headquarters in Maranello brought in almost 4.3 billion euros in net sales.
Is Ferrari profitable in Formula One?
For participating in the championship, each team receives about $36 million USD in prize money, which comes from sources of income like TV rights and circuit sponsorship.
Payments are also made based on how teams place in the Constructors Championship. Mercedes won $61 million USD for winning the championship in 2021, compared to Williams, who finished last, who only received $13 million USD.
Ferrari, the only team to earn this payout, received an additional $68 million USD solely for being a long-standing team.
For their prior efforts in the championship, McLaren, Red Bull, Mercedes, and Ferrari each received a “Constructors Championship Bonus” of $35 million USD.
Red Bull received $36 million USD for being the first team to sign the most recent Concord Agreement, and Williams received $10 million USD as a “legacy payment.”
How does McLaren generate revenue?
Sales of McLaren Automobiles account for the majority of McLaren’s revenue. The company’s GT, Supercar, Motorsport, and Ultimate model lineups are sold through approximately 100 merchants in 40 different regions worldwide. These lines collectively resulted in 1640 cars being sold at retail by McLaren.
Although the F1 business is mostly supported by the income of the other two businesses, McLaren also gets money by winning F1 competitions and sponsorships.
Depending on where they were in the previous year’s race, every team that qualifies receives about $35 million each. Teams are further compensated through additional incentives and prizes, as well as through a portion of the constructor’s championship bonus.
Another significant source of revenue for F1 teams is sponsorship. A multiyear agreement between McLaren and the Belarusian business Miory Steel was announced in 2020.