- Benjamin Zhang
The incredible story of Ferrari's 72-year journey from an upstart racing team to a $27 billion l
Ferrari is one of the most valuable brands in the world.
Ferrari – the Italian supercar maker and Formula One racing operation – is worth $US27 billion.
Unlike many of its rivals, Ferrari is a racing operation first and car company second.
Ferrari was founded as a racing team with the sale of road cars as a means to fund the racing operation.
In 2018, Ferrari delivered more than 9,250 cars, up 10% over the previous year.Ferrari has come a long way since its start as a fledgling race-car builder more than 70 years ago.
In 2015, Ferrari’s IPO on the New York Stock Exchange valued the company at nearly $US10 billion. Nearly four years later, the company’s market cap has more than doubled, to $US27 billion. This makes the carmaker one of the most valuable and recognisable brands in the world. Its prancing-horse logo is synonymous with sex, money, and the high life.
Ferrari wasn’t always the global luxury brand that’s now being traded in New York. The company’s early days as a maker of racing cars were rather humble, and it took an Italian-American racing star named Chinetti to begin the transformation into a purveyor of glamorous supercars for the world’s well-heeled. The company’s success drew takeover interest, and later rivalry, from Ford – before Ferrari became part of Fiat and eventually Fiat-Chrysler Automobiles.
For many years, Ferrari artificially limited its annual production figures to preserve the exclusivity of its cars. But since its IPO in the fall of 2015, the company has steadily increased the number of cars it delivers to customers. In 2018, 9,251 new Ferraris found their way to customers around the world, an increase of 852 cars, or 10.2%, over 2017.
Yet even at more than 9,000 cars a year, Ferraris are still rare. Most of the company’s models are supply limited in that its sales are limited not by how many people want to buy a car but by how many it can make.
Here is the story of Ferrari’s incredible 70-year journey.
In 1908, a 10-year-old Enzo Ferrari saw his first car race and immediately became hooked. As a young adult, Enzo was drafted by the Italian army to fight in World War I.
After the war, Enzo had a hard time finding work in the auto business. He applied to work at Fiat but was rejected because of an abundance of unemployed war veterans. Eventually he found work at smaller automakers.
By the early 1920s, Enzo landed a job at Alfa Romeo as a race-car driver. Fellow drivers at the company included legendary aces like Tazio Nuvolari, here in an Alfa.
In 1929, Enzo launched Scuderia Ferrari, or Team Ferrari. There was no car company yet: Scuderia consisted of a group of drivers who raced the cars they owned.
The team raced mostly Alfa Romeo cars. By 1933, Scuderia Ferrari had essentially become Alfa’s racing division.
In 1937, Enzo shut down Scuderia Ferrari and became the head of Alfa Romeo’s factory racing operation, Alfa Corse. But that wouldn’t last. He wasn’t happy.
A week after leaving Alfa Corse in 1939, Enzo started up Auto Avio Costruzioni. The AAC 815 is the first car Ferrari’s startup built on its own.
AAC built two 815 cars in 1940. Both were prohibited from carrying the Ferrari name because of a non-compete agreement between Enzo and his previous employers. The agreement prohibited Ferrari from using his name in relation to races or race cars for at least four years.
Although WWII forced Ferrari to curtail his racing activities, his company got back to work immediately following the war. In 1945, the company introduced a new V12 engine that would become one of Ferrari’s signature offerings.
In 1947, Ferrari launched the 125. And since the non-compete agreement with Alfa had lapsed, this was the first car to carry the Ferrari name, establishing the company as we know it today.
In the late ’40s, Luigi Chinetti, a successful Italian-born racing driver and a newly naturalized American citizen, approached Ferrari about the prospect of building sports cars for the public.
Ferrari was hesitant because his company’s main purpose was to win races. At that point, the only cars Ferrari sold were for privateers. Chinetti started racing and winning in Ferrari’s cars around the world.
By the early 1950s, Luigi Chinetti got the sports cars he wanted and opened the first Ferrari dealership in the US. Chinetti’s showroom was located in Manhattan but was later relocated to Connecticut.
The US became a huge market for Ferrari’s cars. Even today, it remains Ferrari’s most lucrative market. This opened the floodgates for Ferrari’s business. Legendary cars such as the California Spider.
… the GTO and …… the Testa Rossa soon appeared.
By the 1960s, Ferrari’s cars demonstrated their prowess on and off the track.
In 1963, Ford CEO Henry Ford II jumped at the opportunity to buy Ferrari’s road-car business. The deal failed after Enzo found out that Ferrari would have to ask Ford for money from Detroit to go racing.
Incensed by his failure to close the deal, Ford decided to beat Enzo’s team at the 24 Hours of LeMans.
Ferrari ruled Le Mans at the time. Enzo and his team had dominated the gruelling 24-hour endurance car race — winning six times in a row from 1960 to 1965.
By 1966, Ford’s challenger for Ferrari’s cars was ready. The legendary GT40 was set to race at Le Mans.
Henry Ford II got his revenge. The GT40 won Le Mans with a stunning 1-2-3 finish, ending Ferrari’s dominance.
Ford would go on to win four years in a row, from 1966 until 1969.
By 1969, Enzo realised his company needed additional resources not only to be successful but to survive. That year, Ferrari sold 50% of the business to the company that once refused to give him a job — Fiat!
Enzo Ferrari died in 1988 at age 90. But before his passing, he signed off on one final car to commemorate the 40th anniversary of his company.
The mighty F40!
After the passing of Enzo Ferrari, longtime executive Luca di Montezemolo assumed the position of president and later chairman. Under his guidance, Ferrari was transformed into a global luxury brand during the 1990s and the 2000s.
Today, the company sells its supercars for hundreds of thousands of dollars.
And its hypercars for millions.
Ferrari also licenses everything from clothes to jewellery.
There’s even a Ferrari-themed amusement park!
On the racing front, Ferrari is still one of the best in the game. The company’s Formula One team — still called Scuderia Ferrari — won eight world championships between 1999 and 2008.
With its IPO, Ferrari has completed its transformation from a startup racing operation to a multibillion-dollar global brand. But true to its roots, Ferrari trades on the New York Stock Exchange under the ticker symbol RACE.
Courtesy : Business Insider