Home >Auto >Ferrari SUV to be called Purosangue, 15 new cars coming

Maranello (Italy): Ferrari plans 15 new models, including hybrids, a sports utility vehicle (SUV) called “Purosangue" (Thoroughbred) and special editions in its drive to hit a softened but still exacting mid-term earnings target. The Italian supercar maker on Tuesday shifted to an adjusted core earnings forecast range of €1.8-2.0 billion ($2.1-2.3 billion) by 2022, rather than the doubling to €2 billion promised by late Ferrari boss Sergio Marchionne.

The “Purosangue" could potentially lead to a substantial growth in sales, analysts have said, while Ferrari expects the car to also help lure the super rich in China.

Ferrari CEO Camilleri sought to sooth concerns the vehicle could dilute Ferrari’s exclusive status.

“As a die-hard Ferrarista, I have been a little sceptical when the concept was first voiced at the board," the known Ferrari collector said. “Having now seen the wonderful design concept, the extraordinary features ... I am a hugely enthusiastic supporter."

Ferrari also unveiled a pair of open-topped, limited edition sportscars, as part of a new segment dubbed “Icona" inspired by past Ferraris but boasting the latest technologies to reward its most loyal customers. It also promised to expand its range of so-called GT vehicles that focus more on style and the driving experience rather than extreme performance to lure new customers.

Ferrari ruled out a self-driving model, but added that its much-debated utility vehicle would come by the end of the plan, two years later than initially forecast.

Ferrari declined to give any forecast for shipments other than saying that more than half of those would be sportscars. This year’s deliveries are forecast at over 9,000 vehicles.

ALSO READ | Ferrari quietly revs up for mostly hybrid cars by 2022

The financials

Investors, who are looking for reassurance that the company can maintain recent strong growth, took the change in forecast in their stride and Ferrari shares closed up 3.9%, recovering from earlier losses.

“This is an ambitious plan, but a doable one based on a concrete, detailed framework," Camilleri said its Maranello headquarters.

Ferrari shares slid more than 8% in August when Camilleri described as “aspirational" the targets set by Marchionne, whose sudden death in July jolted shareholders who had expected him to remain until 2021. Under the auto industry grandee Ferrari’s value had more than doubled since he took it public in 2015.

Camilleri and his team outlined a plan to show how a brand known for its racing pedigree and roaring combustion engines will shift to making a utility vehicle and hybrid cars and boost margins to more than 38% without sacrificing exclusivity.

The company increased its dividend payout ratio and announced a €1.5 billion share buyback plan, while its marketing chief promised a “significant increase in average retail price".

Following the map

With margins at 30% now, strong pricing power and an enviable customer waiting list, Camilleri inherits a business firing on all cylinders and is not expected to stray far from his predecessor’s script.

Marchionne had orchestrated Ferrari’s spin-off from parent Fiat Chrysler, positioned it as a luxury brand rather than a carmaker, and managed to do what few thought possible: sail through a self-imposed production cap of 7,000 cars a year without sacrificing pricing power or its exclusive appeal.

Ferrari has clocked up years of record earnings, helped by special editions and a customisation programme.

But it could prove tough to maintain the company’s high valuation as emissions rules tighten, capital spending increases and the diverging interests of investors, racing fans, owners and collectors become harder to balance.

A total of €3.6 billion will be spent over the period to develop new vehicles and shift towards hybrids, aiming to remain compliant with gradually tougher emissions regulations.

The company said hybrid vehicles would make up around 60% of its product mix by the end of the plan, while a smaller six-cylinder engine would be added to its lineup of internal combustion engines.

At the time of the Ferrari IPO, Marchionne had promised to expand Ferrari into other luxury categories beyond cars, but the plan was put on ice to focus on vehicles first. Camilleri said that expansion was still a “work in progress".

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