The Geneva Motor Show in March will be the backdrop for Ferrari's unveiling of it's latest creation, the GTC4Lusso, a revamped version of the Ferrari FF. Ferrari's (RACE ) newest model will be a four wheel drive four-seater that will remain true to form with a 6.2 Liter V12 engine that will get you from 0-60 in about 3.5 seconds and tops out at 208 mph. Many might wonder what business 690 horsepower has sitting under the hood of a family-size vehicle, but those people are not Ferrari's target market. Ferrari has no interest in appealing to the masses and with their offerings beginning in the neighborhood of $185,000, there is a select percentage of people who have the means to become a key carrying member of the elite Ferrari club. Bentley is releasing the Bentayga this year, a 5 seat Sport Utility Vehicle (SUV) that will start at $230,000. True to the Bentley name, the Bentayga will be equipped with a V12 churning out 600 horsepower and going from 0-60mph in 4 seconds. The gentlemen behind the Bentayga, Bentley Motors CEO and Chairman Wolfgang Dürheimer and Chief Engineer Rolf Frech, are the former Porsche people behind the company's first SUV, the wildly successful Porsche Cayenne. The Cayenne immediately boosted sluggish Porsche sales and drove the company forward while providing the necessary financing to create it's next line of vehicles. Even with a hefty price tag the Bentayga has sold out an estimated 18 months work of production, feeding much needed funds back into the Bentley business to allow for further development. According to Dürheimer, "The future of Bentley Motors does not stop with Bentayga," with the company rumored to be working on a another SUV model and a smaller version of its landmark Continental. Having recreated the immediate success that the Cayenne had for Porsche, the Bentley believes they "have found the financing to realize our future." Following not far behind are Jaguar's F-Pace, with Jaguar no longer intent to rely on partner Land Rover for SUV sales, the Lamborghini Urus and Rolls Royce Cullinan SUV set to hit the streets sometime in 2018. Rolls Royce's endeavor seems to be in direct response to rival Bentley's Bentayga as Rolls-Royce boss Torsten Muller-Otvos explained, "The Bentley SUV is clearly the number two; Rolls-Royce is the best in the world and will be when our model arrives." Let the race to SUV supremacy begin.Ferrari was formed as a racing car company with deep roots in the automotive world. The Ferrari name is revered worldwide for its acclaim and history in both the racing and luxury automobile landscape. Top of the line and always at the forefront of innovation, the company strives to create the ultimate machine. Things have changed for Ferrari and what was once a family owned auto maker is now a publicly traded company which needs to serve its shareholders. The company's goal is to continue offering cutting edge design on its vehicles paired with powerful performance and a brand which promotes luxury in all of its aspects. With the upcoming release of the GTC4Lusso, Ferrari is aiming to open up a new line of revenue.
Since its spin-off from Fiat in an IPO this past October, Ferrari's stock has dropped 35%. In an effort to attack the tumbling prices, Fiat CEO and Ferrari Chairman Sergio Marchionne has explored expanding the company's production from 7,200 cars in 2014 to as many as 9,000 by 2018. Ferrari is faced with the predicament of lowering their entry point and offering a more affordable automobile to increase sales, or by increasing it's existing production capacity to bolster its current position. Marchionne cautioned in an October interview how, "We need to grow the demand side before we try to supply it and really destroy the exclusivity of the brand." Expansion in one way or another is necessary as other luxury automobile makers like Maserati with their Ghibli, have lowered the entry point into an ever exclusive club of high end automobile owners. Enzo Ferrari, the company's founder, famously claimed that to continue success, "you should build one less car than the market demands." While the mantra may prove timeless, what the market demands today now is vastly varied from the past.
Global demand for Ferrari is still being driven by the United States where the company is projecting 35% of this years sales. With rapid growth economies slowing down, especially China, and the recent economic downturn it might be worth exploring other avenues to increase sales and profitability for Ferrari. With the company is set to release this year the turbocharged Ferrari 488GTB to replace the 488 Italia, there is no worry that speed and power remain paramount to one of the world's finest automobiles. With a foray into the family market, it will be worth watching to see if Ferrari can rev up their revenue stream and take a turn for the better.