Ferrari headquarters in Maranello, ItalyEnlarge Photo
Ferrari has now released its first financial data since implementing the strategy and so far it looks to be working.
Sales in the first six months of the year totaled 3,767 cars, which was still an increase of 2.8 percent on last year’s results for the period, though the growth was lower and will continue to shrink as the remainder of the year unfolds.
Despite this slower rate of growth in sales, and revenues growing by around 7 percent, profit before taxes managed to soar 22 percent to $232.5 million. The company’s net cash position is also the best ever recorded: $1.6 billion despite high investment in new products such as the technology for the LaFerrari supercar.
As Ferrari notes, while the effect of the reduced volumes will become clearer in the second half of the year, it is already being felt in smaller growth in volumes which are being matched by the significant increase in profit.
Those profits are being generated from new services like the Tailor-Made Program and the Ferrari Classiche restoration program. There were also significant gains from Ferrari’s licensing, retail and e-commerce businesses as well as from record visitor numbers to the official Ferrari Museum in Maranello, Italy.
The good news is that more Ferraris are still being delivered to the U.S. Sales here, including those from Canada, were up 9 percent to 1,048 cars over the first half of the year. Despite the automaker’s decision to reduce sales, short-term forecasts suggest that there will be a slight increase over the next few months to avoid lengthening the waiting list to over two years.
The countries where sales have decreased substantially have been Italy, due to the economic crisis and the targeted crackdown on tax evaders, and China. Ferrari says the slowdown in China is primarily due to reduced sales in Hong Kong due both to a decision by the automaker to reduce deliveries but also because of fears of a tightening up of taxes on luxury goods.