The European engine is in an unprecedented crisis in which problems overlap one after another. First energy prices, then high interest rates and, to make matters worse, a fall in demand as a consequence, have critically damaged their margins. On the other hand, a large-scale invasion of Chinese cars is destroying profitability in a high-voltage race. To continue, Trump’s rise promises tariffs that generate additional costs. Finally, all this seasoned with the transition towards the electric car in the background. A true explosive cocktail for the sector that has ended up generating a real crisis.
In this context, real stock market collapses have been experienced so far in 2024 with Volkswagen, BMW, Stellantis and Mercedes losing 28%, 29%, 45% and 15% respectively. However, there is one firm that has managed to save itself from all this catastrophe and, in fact, is rising strongly: Ferrari. One of the luxury cars par excellence has a true love affair with the parquet. So far this year he has earned 35% and its position does not stop improving. The famous Italian vehicle has been able to build large walls that have protected it from each and every one of the threats mentioned. In your case, the nature of your business, the power of the brand and your audience are the keys to having become the great exception to the motor crisis.
Immune to China
The main problem that the European motor has encountered is the great dependence on China, whose growth and overproduction of cars is destroying the prospects of companies like Volkswagen, for which the Asian country accounts for 25% of its turnover. Other firms such as Mercedes or Stellantis have similar figures. However, China represents only a very small fraction of Ferrari. this country It does not even represent 9% of its entire quota of business worldwide, led mainly by the US, which accounts for 28%.
This is what has allowed Ferrari to sell only 2% fewer cars in its latest and controversial results despite the fact that turnover in China collapsed by 29%. Despite this ‘rejonazo in the East’, CitiGroup spoke of “solid, although not spectacular” results, while the firm’s profit rose by 7%.
Furthermore, even selling slightly fewer cars, total revenue increased by 7% to €1.73 billion (in the third quarter). How is this possible? Thanks to the enormous pricing power that the brand has acquired. While the rest of the companies compete to maintain their market share, Ferrari can afford ostentatious price increases without its customers batting an eyelid. Consequently “our positive outlook for super luxury carswhich remain intact despite the fact that deliveries have been scarce,” Bloomberg Intelligence analysts said in a note.
Trump ‘doesn’t matter’
That ‘the rich don’t cry’ is one of the keys why analysts consider the other big problem practically solved: Donald Trump. The European firm barely moves with Trump’s victory, despite the fact that he promises a universal tariff of 10% and before the elections it has pointed directly towards Europe. In that sense, Morningstar points out that “the problem with Ferrari is that, whether it is a 10%, 20% or 30% tariff“If someone wants to buy a Ferrari, they don’t look at the price. “It’s ridiculous, but that’s the way things are.” .
This was clearly seen in the F80 ‘supercar’ that launched in October. As Edmond Rothschild pointed out, “Every 10 years new supercars appear to show advanced technology developed by the firm’s high performance department.” However, the Italian firm has surprised everyone and everyone with the price of the 799 models, which will cost 3.9 million euros. “the number of cars that will be manufactured and the The price greatly exceeded expectations and the shares rose. “Ferrari has already achieved very good results so far this year, far outperforming the rest of the automotive sector.”
This show of muscle ‘in luxury’ has already had its impact on analysts. Proof of this is that Evercore ISI has updated its financial guidance for Ferrari, analyzing in detail the specialty car business from 2023 to 2030. “The recent launch of the hypercar is expected to generate significantly more revenue and EBITDA than previously modeled.” The firm suggests that these figures will likely exceed what had previously been anticipated by consensus.
Ferrari’s green victory
For their part, analysts believe that Ferrari is one of the ‘luxury’ car brands who are better prepared for the renewal towards electric vehicles. Already on September 27, the firm announced that it had prepared its first fully electric ‘supercar’ for the fourth quarter of 2025. According to the firm, the model is “fully on track.”
The firm has had a project underway since 2021. Despite arriving very late and considering himself one of those considered to be ‘losers’ of the green transition, he has managed to make up for lost time and in fact, his ‘lateness’ may even be good news. Well, those firms like Stellantis or Volkswagen that previously opted for EVs are have encountered major competition problems and sales slowing. So Ferrari would reach a more ‘mature’ market and maintain that position as a ‘luxury brand’, allowing it to escape the hardships of the price war.
JPMorgan has upgraded Ferrari stock from Neutral to Overweight, citing the company’s high level of visibility into earnings growth and its promising strategy around vehicle electrification. It is estimated that the first electric car Ferrari will cost more than $500,000, although there are still no completely closed figures. From Mediobanca they explain that the new model can be a revolution. “I expect the new EV to be a niche model, representing a little more than 10% of annual sales,” Balloni said.
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