Report: Ferrari Hopes to Double Profits by Adding Utility Vehicle

Ferrari is reportedly considering a utility vehicle as part of its push to double its profits by 2022. Speaking with Bloomberg, sources familiar with the matter who asked to remain unidentified said that the automaker is trying to expand beyond supercars and intends to deliver more than 10,000 vehicles annually as part of a new plan. This is the second time in less than a month that we’ve heard Ferrari will about-face on its promise to never build an SUV, following a report that the prancing horse brand is working on a utility vehicle with hidden rear doors.

Delivering over 10,000 vehicles could mean that Ferrari must comply to tighter emissions regulations. The automaker, however, may build more hybrid vehicles in order to tackle that issue. Fiat Chrysler boss Sergio Marchionne is currently CEO at Ferrari and has been pushing the automaker toward more volume. As a result, Ferrari is already well past the 7,000-car production cap former Ferrari chairman Luca di Montezemolo imposed to preserve the brand’s exclusivity. Currently, Ferrari is valued at 17.5 billion euros or roughly $20.6 billion at current exchange rates. Meanwhile, its U.S. stock is valued at $109.19 per share, up 3.8 percent.

As part of its move toward doubling its profits, Ferrari is evaluating the possibility of a car that’s more spacious than the GTC4Lusso, a four-seat, all-wheel-drive shooting brake. Despite previous objections, including from Marchionne, the more practical Ferrari will be aimed directly at Asian consumers, particularly China. Unidentified sources who spoke with Bloomberg also noted that in China alone the new model could contribute to 2,000 vehicles to the automaker’s annual deliveries. They also revealed that, like Maserati and Bentley, Ferrari doesn’t want the more practical utility vehicle to deviate much from the rest of its lineup when it comes to exterior styling.

Richard Hilgert, an analyst at Morningstar Inc., told Bloomberg that a utility vehicle would be risky for Ferrari and that it must look, sound, and drive like one while being more practical. The automaker is currently aiming to boost sales to 9,000 cars in 2019, which is higher than last year’s target of 8,016 units. According to analysts at Mediobanca SpA, Bernstein, and UBS Group AG, a new strategy that Marchionne hinted at this past May could push sales targets up to 15,000 units.

In order to address the new emissions regulations it will have to comply with once it loses its status as a “small vehicle manufacturer,” Ferrari will add more hybrids to its lineup, with the first expected to arrive in 2019. The increase in output also means the automaker’s sole manufacturing facility in Maranello, Italy, may get a second shift. At the start of next year, Marchionne will present a new plan for Ferrari and FCA before he retiremes a few years later.

Source: Bloomberg

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