A mere forty-eight hours after the ousting of Ferrari president, Luca di Montezemolo, I can’t help but feel like a coup has just occurred—that Fiat has officially taken over Ferrari.
Reading press reports and commentary from new president, Sergio Marichonne, about his ambitions for the marque as well as gleaning over the looming Fiat Chrysler Automobiles (FCA) flotation in October—a $55 billion initiative—one can put a finer point to the events of this week that have brought a 23-year reign to an end.
Marchionne has been credited with turning around Chrysler when he was appointed CEO and he also has been credited with the same performance for Fiat. Clearly he has an eye for positioning companies for success and Ferrari must have seemed the lone wolf of legacy compared to his radical and somewhat revolutionary idea of what a new car juggernaut should be.
In order to keep up with Mercedes, VW, Renault and the majors from Japan, Marchionne sees Ferrari’s scarce=valuable model as antiquated and lacking the opportunity to extract the maximum from all potential sales.
In raw numbers, Luca was looking for 7,000 cars per year while Marchionne felt that 10,000 was very achievable. There is little doubt that Di Montezemolo wanted Maranello to remain Ferrari and not got swept up in the Fiat conglomerate like VW’s Lamborghini did. Marchionne, no doubt, felt differently.
Intriguingly, Marchionne pays homage to Ferrari as a brand and recognizes the importance to Fiat telling the press:
“People should not underestimate the importance of Ferrari for the group,” said Marchionne. “Structurally, in terms who we are as carmaker, they have and will continue to define us.”
Marchionne recognizes the power of Ferrari’s brand, product and loyalty and he has Luca di Montezemolo to thank for that but he doesn’t see Ferrari as being the lynch pin for the new FCA entity over the long term when asked if he would sell shares in the Maranello brand:
“Do I think they are essential to the configuration of FCA forever? The answer is no,” Marchionne said today. “But they represent the best of what a carmaker can be.”
Marchionne seems intent on taking the fight to FCA’s rivals with cross-pollination, shared resources and platforms. Getting Alfa Romeo and Maseratti back on form by using Ferrari’s brand equity is appealing to the Italian-Canadian CEO.
It’s all measuring up to a format that Marchionne must surely have felt Luca di Montezemolo was missing. Luca’s criticism of the new engine format—a turbo V6—was antithetical to why Mercedes, Renault and now Honda say they are more interested than ever in formula 1. Ferrari could become a proving ground for what seems to be the future of internal combustion engines—the turbo.
The F1 presence in the Middle East and Asian market where luxury sports cars and SUV’s are all the rage also appeals to Marchionne and could see a Ferrari SUV to rival the Porsche Cayenne. If not Ferrari, then Ferrari tech in a Maserati or even a super Jeep Grand Cherokee…with a turbo of course.
In the end, Marcionne is on a mission to build an empire and raise profits by 18% for FCA and Sergio’s vision for Ferrari’s role in the plan was clearly not shared by Di Montezemolo who wanted to remain at arms length from the Fiat juggernaut.
While technically not a coup d’état, it could be called a forceful takeover of an asset that remained elusive. Perhaps Marchionne felt that Fiat had given Ferrari too much deference and it was time to tow the company line.
Look for Ferrari to fix their ailing V6 turbo, it’s production escalate and it’s brand and virility to be leeched by Chrysler and Fiat in what is hoped to be a viable competitor to the VW empire. Who knows, maybe Marchionne might even see the wisdom of a Le Mans LMP1 challenger?