VW to buy Ferrari?

[tarzoon]

http://www.autoblog.com/2010/11/11/repo ... ari-stake/

What do you thin?

[JohnsonsEvilTwin]

http://www.autoblog.com/2010/11/11/report-volkswagen-eying-ferrari-stake/

What do you thin?

No way will Ferrari be sold. Maserati and Alfa Romeo will be the sacrificial lambs well before Ferrari, this is just a bit of Journo frenzy.

[donskar]

http://www.autoblog.com/2010/11/11/report-volkswagen-eying-ferrari-stake/

What do you thin?

To quote from the source you linked to:

. . . you might be inclined to file this report in the "wild rumor of the day" category and be done with it. And . . . you'd certainly be justified . . .

[segedunum]

It's not really a question of Maserati or Alfa being sacrificed. It's a question of the state of the parent company Fiat and there's been question marks on that for some time. They need serious cash and Ferrari isn't helping them otherwise. It's a cost they're expected to keep in many ways.

It's not as far fetched as you might think. This car manufacturer crisis is still very much with us and things are going to get desperate.

[donskar]

It's not as far fetched as you might think. This car manufacturer crisis is still very much with us and things are going to get desperate.

I work in management at a Toyota dealership. Far from things getting "desperate," Toyota, Ford, GM, Honda and others are making HUGE profits. Funnily enough, one of the manufacturers who IS having a problem in the US is . . . VW. High prices and low initial quality have hurt them badly in the US -- one reason they just made drastic price cuts on US-sold models (Jetta, for example).

Of course, anything is possible, but I don't see Fiat selling a national/cultural icon. I think the Italian government might step in with a bailout before that happened.

Hope I sorted out the typoes -- it's only 0715 here!

[segedunum]

Don't be fooled. The apparent 'recovery' of the car industry has been fuelled by government borrowing and subsidies, especially in the US, and any apparent profits are as a result of that money and creative short-term accounting. Things haven't just magically got better. An Italian bailout? The Itialian government is broke.

When Luca Montezemelo punched the air after qualifying today there was more at stake than just Alonso's championship.

[xpensive]

I agree seg, it's really amazing the way the government bailed out those hopelessly miss-managed corporations right in the home of free enterprise. Funnily enough, I didn't hear no republican or tea-party protesters at the time, did you Don?

But VW having Lamborghini, Bugatti and Ferrari/Maserati under its wings, I doubt it?

[JohnsonsEvilTwin]

"When Luca Montezemelo punched the air after qualifying today there was more at stake than just Alonso's championship"

So potentially winning a WDC will mean future security? Didnt work for Reanault in 2005 and 2006, why Ferrari?

Ferrari will not be sold to VW for so many reasons. The first being as X pointed out, that Lamborghini currently resides as VeeDub property.
The second is that Ferrari actually makes money. FIAT would be loathe to sell any of its profitable empire.
Thirdly, Middle eastern investment funds would pay more money for the same share, and not demand any technological sharing of FIAT's tech like the lauded multair technology.
Finally the Italian government would have enough to buy Ferrari and run it as a separate government enterprise. Ifr a company can show big profits over the last 5 years, buying it and covering the loan is easy as pie.

[marcush.]

Ferrari making money? i heard they have started producing cars again recently...

[JohnsonsEvilTwin]

2009
http://www.egmcartech.com/2010/02/18/ferraris-profits-fell-28-in-2009-sales-down-5/

2008
http://www.pistonheads.com/ferrari/default.asp?storyId=19360

2007
http://www.fairinvestment.co.uk/News/insurance-news-Ferrari-profits-soar-as-rich-list-grows--675.html

2006
http://www.automotoportal.com/article/ferrari-annual-report-2006-impressive-growth-in-revenues-and-profits

This years figures are harder to get, but the gist is Ferrari are and have been making alot of money for some time now.

[segedunum]

So potentially winning a WDC will mean future security? Didnt work for Reanault in 2005 and 2006, why Ferrari?

Because it is Ferrari's business. The whole board of Fiat and Ferrari did not turn up there today to get a tan. I don't recall Renault doing that.

Fiat have the dead elephant Chrysler on their back because all the car companies got together and decided it would be better if they all sank together. It's the state of Fiat overall that matters, niche performance car building just doesn't cut it and the amount of investment needed to keep Ferrari going. If Ferrari were really doing so well they would be independant, but they're not.

VW might well not be buying Ferrari, but something needs to be done sooner or later.

[JohnsonsEvilTwin]

The whole Mercedes board showed up last year, so is it their business too?

F1 is not Ferrari's business. Selling cars at huge profit margins is their dominion, F1 is an expense to them the same way it is to all the other teams.

niche performance car building just doesn't cut it and the amount of investment needed to keep Ferrari going

Ferrari's profit margins are better than FIAT themselves and have been for some time with a couple of exceptional years.. Ferrari is a healthy part of FIAT and will not be sold because selling profitable parts of your business to plug the unprofitable is financial suicide, even Italians get that!

Ferrari not being independent has more to do with Enzo selling out than it does to with their business model. Suggesting they are dependent because they are "niche" is fallacy. Porsche are "niche" and they nearly swallowed VW!

[segedunum]

If Ferrari could sustain themselves then they wouldn't be reliant on Fiat. The problem here is the future investment required to keep Ferrari going as well as the obviously declining sales. Their profit margins don't justify it, but then, that's the case with a lot of car companies.

Porsche had a go at swallowing VW because of their ridiculous pyramid scheme that VW had to rescue them from, so that's not the best example you could come up with.

Whatever though, the notion that the crisis for car companies is over is well wide of the mark.

[JohnsonsEvilTwin]

Porsche a bad example?

They were undone by greed! Not business model. Their company had the highest profit margins in the automotive world, and the company made a mint because of it.
The pyramid scheme you allude to was share price driven, and was their to cover as leverage what porsche lacked most...SIZE, and had nought to do with the fact that Porsche was for many years the most profitable auto maker in the world.
Weideking admitted his wrongs, so why you question this example is beyond me.

Ferrari cannot decide to be independent either. No more than Audi can from VW or anyone of its other brands.
If it was to go it alone be in no doubt that an 80k Ferrari would be in the offing based that would be hugely profitable to Ferrari Spa.

Take also into consideration the Ferrari Families 11% share and also veto rights.
You see them selling out to VW? With Lambo and Porsche on its books?

VW owning Ferrari is as far off as Ferrari building a people carrier.

[segedunum]

Porsche's profit margins were fabricated at their height and mostly came from the overblown SUV segment which was defunct two years ago, and a pyramid scheme involving fabricating how much money you actually have is now a 'business model'? That says nothing about their future or that of Ferrari. Oh, and Ferrari sells cars off their Formula One image, as they always have. The board of Ferrari and Fiat still felt it important to turn up today.

I didnt say that VW was a likely acquirer, just that it is likely that all is not what it appears when it comes to car manufacturers. Volume car manufacturing as well as the oversupply of more niche market segments has gone too far and gone on too long, and government bailouts as well as financial and corporate sleight of hand have not painted things over.