6 ms·

Ferrari Status

75 points by surprisetalk 1y ago

1970-01-01 1y ago
Enzo is rolling in his grave! "I don't sell cars; I sell engines. The cars I throw in for free since something has to hold the engines in." --Enzo Ferrari
FirmwareBurner 1y ago
>“We are not – we are not – a car company. We are a luxury company that is also doing cars.” Replace Ferrari with Rolex and it's basically the same article. Veblen is such a good business model and place to work, if you can hack it that is. Imagine you're a sales guy at Honda dealership, well you have to work hard to convince the middle aged dad why buy a CRV instead of a Toyota RAV4. However, if you work at a Bugatti dealership, you don't need to convince the oil-rich Sheikh why he should buy the 2 million dollar car, he already wanted to buy it before he even stepped in. So not only is your job easier than the guy in the Honda dealership, it's also much better paid. The very definition of inequality. The same is true for other businesses. It's much easier and profitable selling Azure /Office 365 subscriptions to businesses, that some SW solution from a mom & pop shop.
- thefourthchime 1y ago
  Exactly.
- VirusNewbie 1y ago
  Ferrari makes money on F1, sells T-shirts and hats and whatnot, along with very expensive cars. Does Rolex have other revenue streams aside from overpriced watches?
  - os2warpman 1y ago
    I would never own a rolex because where I live only ambulance chasers, businessmen who are definitely guilty of wage theft, morbidly obese elderly men in gold chains who reek of cigars, and street pimps wear them but from what I can gather they charge approximately $1,000 for a service and a mechanical watch needs servicing every 5-10 years depending on how complicated it is and how often it is worn. So that's like a $100-200/yr. annual subscription to wear an already expensive watch.
    - neogodless 1y ago
      Assuming I take your anecdote at face value, I'm quite impressed at how well you keep tabs on all of the Rolex owners you've met, identified their occupations as well as illegal or immoral activities. I've seen people wearing watches, but hell I have hard time identifying the brand of watch, let alone where the person wearing it works.
      - kulahan 1y ago
        It's pretty easy to spot a Rolex once you know a little bit about them. Get a closer look and it's even easy to spot fakes. However, I agree with the first part of your comment in a way, but it's really not that hard to get a rough estimate of someone based on how they choose to present themselves. They didn't exactly get forced into that look.
        neogodless 1y ago
        That's a valid argument, that some stereotypical appearances are relatively consistently accurate. Though I'm wondering what, exactly, defines the appearance of a specific lawyer who pushes for accident victims to sue, or businessmen that participate in wage theft. How do you tell them apart from... other lawyers or random people wearing suits?
        no_wizard 1y ago
        I'll say this though, when it comes to corpo execs, at least in the USA, if they think they can get away with some illegal and/or unethical activity and they believe that it won't impact any potential profits (either greater than the punishment or benefits to themselves, because we rarely if ever jail executives in this country or hold them accountable without immense public scrutiny), they'll do that thing 9.9 out of 10 times. Wage theft is rampant here, especially for lower wage workers. The government simply doesn't exist in a capacity to actually prevent these things, and people in general are too apathetic to other peoples well being, let alone engaging in appropriate political discourse, that the needle rarely moves forward for your average citizen.
  - davedx 1y ago
    Does Ferrari turn a profit on the F1? I support them and it’s been a while since they’ve had any big wins?
  - caycep 1y ago
    Sadly, on my last trip over there, the average Italian Ferrari fan has been suffering akin to a Detroit Lions fan
- deadbabe 1y ago
  If you cared that much though why not simply get a job selling Bugattis?
  - fragmede 1y ago
    They're not hiring. Unless you're the Bugatti dealership's son, or sleeping with him, you're not getting the job.
  - kulahan 1y ago
    ...For the same reason anyone can't simply get a job making $250,000/yr? It's not like jobs are something you choose - you request it.
- wcfrobert 1y ago
  > he already wanted to buy it before he even stepped in. So not only is your job easier than the guy in the Honda dealership, it's also much better paid. Luxury brands spend millions on marketing and brand awareness. In some sense, all the "sales work" have already been done before a person sets foot into a Bugatti dealership. Reputation takes decades to build but just a few missteps to destroy. Brand is way more fragile than people think. As soon as Bugatti stops making great cars, they'll fall into a place where they can't compete in the luxury market, nor the mass market Japanese car brands like Honda or Toyota. In that sense, luxury fashion seems to be a easier market than watches or cars. You don't need an innovative engineering team. Just spend millions on marketing to uphold the common narrative you are a luxury brand. And that shirts with your logo on it costing 10x more than a similar product at say H&M, is not only justifiable, but sensible.
  - FirmwareBurner 1y ago
    >Luxury brands spend millions on marketing and brand awareness. When was the last time you saw an ad to buy a Bugatti Chiron?
    - GuB-42 1y ago
      How come you know about the Bugatti Chiron? Did you even saw one for real in your life? The simple fact that you (and me, and everyone else here) know about it show that people in marketing are doing their job. I don't remember seeing an ad for a Bugatti Chiron, I am obviously not the target market, but I stumbled upon an ad for a private jet! Also other luxury cars and watches that make Rolex look like child toys. I was when I worked in a helicopter company and someone picked up a magazine from the showroom where customers get their helicopters delivered. The content was out of this world, I remember an article on the merits of private jets over travelling first class (I guess anything less is unthinkable), with purchase recommendations. So the ultra-rich get their ads too.
    - tolien 1y ago
      > When was the last time you saw an ad to buy a Bugatti Chiron? Ads don't just have to be a photo on a billboard, though, or the entire thing of influencers wouldn't exist. How many times has the Chiron been on Top Gear - I reckon at least three times (I can remember once in the Clarkson era and another time in the Harris/Le Blanc era; the magazine's had one at the Nürburgring at least once)? Sure Bugatti's letting them loose with a multi-million euro car out of the goodness of their hearts.
- eschneider 1y ago
  It's not a good/bad business so much as a _different kind_ of business, with different engineering/sales requirements and different customers. Neither is better, or more profitable over the long term than the other, but you really need to know which game you're playing.
- potatolicious 1y ago
  > "However, if you work at a Bugatti dealership, you don't need to convince the oil-rich Sheikh why he should buy the 2 million dollar car, he already wanted to buy it before he even stepped in." Respectfully disagreed. The sales people for veblen goods work extremely hard because competition is intense even within that space. The Bugatti salesman is competing with Ferrari, McLaren, Lamborghini, etc. The margins per-sale are great, but because of your low volumes you experience a lot more volatility. Minor fluctuations in sales have disproportionate impact on your bottom line. I once worked for a luxury real estate brokerage and had opportunity to talk to real estate brokers who dealt in ultra-high-end real estate (the kind of properties that people make YouTube videos about). One conversation stood out to me that's relevant here: I asked him about a listing for a Manhattan penthouse that had been making the news (mid-8-figure buy-in), and his response was that it was an incredibly risky property to represent, because the list of potential buyers is perhaps a dozen people long. If none of them move on the deal then you're holding an absolutely immense albatross. Ultra-high-end goods are generally susceptible to this. Your market is small enough that it doesn't take a lot to existentially threaten you, and there is no shortage of people who want to eat your lunch (just like with any other market).
  - no_wizard 1y ago
    >I once worked for a luxury real estate brokerage and had opportunity to talk to real estate brokers who dealt in ultra-high-end real estate (the kind of properties that people make YouTube videos about). One conversation stood out to me that's relevant here Do you happen to have more sharable anecdotes / thoughts around this? I realize its off topic, however I think it still has value to warrant that. I'd be interested in anything you can share about it. I'm curious how the 'day to day' folks see things vs how its sold and told to the rest of us via news magazines or books.
    - potatolicious 1y ago
      It's a super interesting scene, and was a great eye-opener into how the mega-wealthy side of the world goes. A few things that pop into my brain in no particular order: - At the high end, everyone's got a gimmick. You can't just be personable and charming, you have to be so memorable as to feel like some fictional character. Your clientele are expecting more than mere representation, but something/someone who makes their life actively more interesting. - Part of this may have been the market (NYC), but I got the distinct feeling that a lot of this was that buyers wanted a NYC fairy tale. If you're wealthy enough, it's not enough to have an agent, your agent has to spring forth and become a side character in the adventure story of their life. - There's a lot of spilled ink about the mega-wealthy buyers (Middle Eastern oil barons, Russian oligarchs, Chinese billionaires, etc.) but they are a vanishingly small portion of the population of very wealthy people. In general I think most people have a poor appreciation of how little of the ultra-high-end consists of foreigners and high-profile business people that they've heard of. - Related, there are way more wealthy Americans than most people appreciate, and the sources of their wealth are way more mundane than most people suspect. There are more 8-figure luxury condos being sold to families that own car dealerships and trucking companies than tech wunderkinds or petro-oligarchs. By multiple orders of magnitude.
- buescher 1y ago
  Replace cars with motorcycles,and luxury with t-shirts, and you have Harley-Davidson.
  - thefourthchime 1y ago
    No, you can go buy any Harley you want. You can't just buy any Ferrari or Rolex, you have to be invited, usually by buying lower level stuff they want to get rid of.
    - kulahan 1y ago
      Porsche (and I assume others) does this as well. You need something like $1.5M in Porsche inventory before they'll invite you to purchase a GT3 RS.
      - codezero 1y ago
        I know someone with a GT3 RS who owns no other porches. Is this just for new models? (Theirs was a few years old when purchased)
        gpderetta 1y ago
        Of course Ferrari and Porsche don't control the secondary market, although I understand they might put restrictions on how soon you can sell one of their high end cars.
      - FirmwareBurner 1y ago
        I guess they probably don't want the dirty uneducated "new money" crypto bros, TikTok influencers and OnlyFans hoes spoiling their brand image, they want the well connected Epstein Island elites who come from royalty and old money.
kridsdale1 1y ago
TFA explains the true driving force behind Enshittification. It takes a very strong will to say no to growth and investment, because you know it will make what you do change from excellence in to shit. Sometimes your customer base morphs (see Facebook) and you survive. Sometimes your only market was the high end discerning customer, and now that you’re shit, you’re dead.
- bombcar 1y ago
  One possible solution to enshitting is to basically franchise. If the market can support 5 of your nice business, instead of growing 5x (which often enshits) spawn four independent copies.
  - Wojtkie 1y ago
    How would you franchise out a product like software? I haven't really thought about that before.
    - theyinwhy 1y ago
      White label solution
  - pantalaimon 1y ago
    But when you look at restaurants that turn their business into a franchise, quality usually takes a turn for the worse
- ToucanLoucan 1y ago
  I don't think it's so much that investment does that as leaving your competencies. I've been working at a private firm for years now. The culture is excellent and we use the products we make. We also don't make our product do every last thing it could possibly do, nor do we support every last thing our product in theory could: we focus on what our customers want and buy now. You can't use what we make for everything, but what you can use it for, we lead our industry in. We've grown tremendously but we're still sub-200 in head count and want it to stay that way. We're rolling in profits because we keep our operation lean and responsive. It seems to me the enshittification happens when you try and offer a service to the entire world and can't manage to succeed at that unless everyone and their mother uses it, which itself requires shit tons of employees and IT resources and datacenters, and if it doesn't work out, it all goes in the bin.
trynumber9 1y ago
>why don’t more companies follow Ferrari’s lead Ford did try before. For example, the 2006 Ford GT. In comparison, the similarly-priced Ferrari F430 of the era was the mass market automobile with about 5x as many made. So I wonder how much one should draw from these rationalizations of prestige marketing. At the end of the day Ferrari still uses its larger super-car production capacity to keep even Ford only an occasional entrant into the low-end of market.
- ben7799 1y ago
  That still doesn't prove anything. The market demand for the Ford GT could have been 1/2 what Ford produced but the market demand for the F430 was double what Ferrari actually produced. I am not saying that is actually the case, but production #s just don't really tell the whole story. Ford only dabbles in these kinds of cars, they have different reasons for picking the # of units they build. They are a lot like Honda, they are not dedicated to this and they instead just build a small # of sports cars every once in a while to try and improve their reputation. The article glosses over the core founding purpose of each company too. Ford was founded to build massive #s of assembly line built cars at a price the average worker could afford. Ferrari very reluctantly built street cars to fund racing and decided the sport/luxury cars were the best way to make the maximum money with the smallest # of street cars. Less street cars meant less distraction from building the racing cars.
  - trynumber9 1y ago
    I'm not saying it proves anything but Ferrari is one of the higher volume manufacturers within super cars This applies even compared to many of their competitors we think of as mass market car producers (such as Ford, Toyota, Honda) when they make cars that compete with Ferrari. As you say that's almost entirely due to demand. But the focus should be on how does Ferrari consistently keep such a large portion of the high end car market? Because that's the key to their success. Many companies can make cars that they can sell out in small volumes at Ferrari prices. But they don't see it scaling, while Ferrari does.
    - 1y ago
DrNosferatu 1y ago
My understanding was that Ferrari was in the business of selling a very specific badge, a very specific engine purr, a very specific shade of red and a certain relative level of dynamic performance - the absolute value of this last one changes with time. All this on 4 wheels. Are you telling me that selling branding rights to Acer laptops and to cheap cologne is (an important) part of their core business?
- FinnKuhn 1y ago
  I wouldn't call about 10% of their net revenue nothing, but also not a core part of their business. I think it goes more towards promoting the brand and image. https://www.ferrari.com/en-EN/corporate/articles/2024-full-year-and-fourth-quarter-financial-results https://www.ferrari.com/en-EN/corporate/articles/2024-full-y...
- technothrasher 1y ago
  > a very specific shade of red To be fair, Rossa Corsa (i.e. "Ferrari red") has changed significantly over the years.
game_the0ry 1y ago
Enzo is literally projectile vomiting in his grave right now. This is not the Ferrari he created. This is the corpo-monster called "brand". Yuck.
ecocentrik 1y ago
As for stock price, it's not reflective of their core strategy, it's reflective of an explosion in demand that is apparently starting to soften.
toomuchtodo 1y ago
https://en.wikipedia.org/wiki/Veblen_good https://en.wikipedia.org/wiki/Veblen_good
WalterBright 1y ago
Car companies fund racing to sell consumer cars. Ferrari sells consumer cars to fund racing.
- OtherShrezzing 1y ago
  Ferrari spends $140mn on F1 and brings home $90-100mn in prize money, plus another £150-200mn in sponsorship. Ferrari is a very rare thing in modern motorsport. A team that races to fund racing.
  - caycep 1y ago
    the problem with rarified air is that only Ferrari can race Ferraris. Given the low volume, high prices, and resultant engineering issues (cough cough overheating) that wouldn't exist in cars more on the mass market, requiring teams of engineers to support. The average car enthusiast for track days will be seen running Mustangs, Corvette/Camaros, BMW M2/4s, Toyota GR 86s/Supras/Corollas, Honda S2000s, Nissan Z's, etc. But Ferrari is essentially irrelevant. Sadly, I think Porsche is going that way; before, one could also run with the above gaggle with a decent 911 or Cayman. Now that the entry level is climbing well above the $100k mark new, and what was supposed to be their track car (GT3) is approaching Ferrari prices, they are becoming less and less relevant. And they might not even survive the China situation...
    - ojame 1y ago
      I'm not too familiar with the history of a few that you've mentioned, but the Mustang (excluding the GTD), Supra, Carolla, S2000, Z never had track focused cars. For the time-poor and money-rich racing enthusiast, lacking a turn key package isn't really an option. Your local track days where you see the likes that you mentioned - you'll also likely get a few Porches etc too. But there's absolutely a culture of racing higher end cars, the GT3's, Ferraris (488 Pista, 360 Challenge Stradale, starting to see XX's around too), the Valkyrie and Valiant etc. There's also those that grab older Cup cars and track them to the track. There's absolutely a market for turn key, track focused, road legal Ferrari's.
  - 1y ago
WalterBright 1y ago
A couple years before Enzo died, there was a TV tire commercial which asked "Why do Ferraris come with Firestone tires? Because Mr. Ferrari wants it that way." and then showed a picture of Enzo smiling. (I don't recall if it was Firestone or Goodyear.)
- GoofGarage 1y ago
  It was Goodyear, specifically the Eagle VR50. The advertisement featured a Ferrari 308 GTB. Ferrari had only adopted radial tires in racing a decade earlier. I'm curious as to what deal they got with Goodyear at the time, as radial tires (including high performance versions) were already long ubiquitous in the United States by the time that commercial came out, which I believe was actually after the end of the 308's production run.
  - WalterBright 1y ago
    Thanks for the correction! I tried googling it, and got nowhere.
bix6 1y ago
My neighbor is a huge car guy and owns everything but Ferraris because “they make you buy all the shitty Ferraris before they’ll let you buy the good ones” :p
- caycep 1y ago
  granted, even the good ones have issues...Gordon Murray had choice words for the welding quality on the F40s...
- bmelton 1y ago
  Is Jay Leno your neighbor? I suppose the fact that the #1 car guy in America won't buy Ferrari amplifies the signal that Ferrari isn't actually a car company That they also won't let you modify your cars to your liking (see Deadmau5's fights with Ferrari) is another
  - 4gotunameagain 1y ago
    But he has admitted that he likes them and that they are excellent cars, he just not like the whole experience: https://youtu.be/VUPOvcolNZg https://youtu.be/VUPOvcolNZg
    - potato3732842 1y ago
      Jay Leno also doesn't feel a lot of pressure to own those kinds of cars because they're not really what he's into. When you look at what he actually does, he's a collector of and benefactor for the restoration of niche vehicles. It is uncontroversial to say that Ferraris are cars of note. Somebody will save them. His resources are better spent on the stupidly niche things that nobody will care about if he doesn't. So it's easier for him to say "meh, not for me" than it is for someone to whom those kinds of cars are more relevant.
  - deleted 1y ago
    [deleted]
- fredophile 1y ago
  My understanding is that that's pretty common in that part of the car market. I know you can't get the really high end McLarens unless you've bought one of the cheaper ones already.
toyg 1y ago
One should remember that Ferrari was effectively on the verge of bankruptcy for most of Enzo's tenure as leader. Eventually he was forced to sell to FIAT, and spent his last few years pretending that he was free to make the choices that FIAT's owner Agnelli wanted him to make. Ferrari eventually turned a corner once Enzo died. Enzo Ferrari always wanted to make a better Alfa Romeo, and he did. Branding was a side effect that other people exploited later.
pedalpete 1y ago
I'm currently listinging to Founders Podcast - The Obsession of Enzo Ferrari[1] Though some of the points may be correct under current management, I think this quote would have Enzo turning in his grave "We are not – we are not – a car company. We are a luxury company that is also doing cars." This playbook where you put your brand on a bunch of random things to sell, while the prime focus gets watered down only works for a short period of time. Aston tried the same thing, going so far as putting their badge on child strollers. The car industry is going through such upheaval that much of this may not matter in the next 20 years, but I fear they are going to destroy a great brand through a lack of focus. [1]https://open.spotify.com/episode/2O6toYAw3RjjTQ4SEzKIru?si=11841a684ba14b26 https://open.spotify.com/episode/2O6toYAw3RjjTQ4SEzKIru?si=1...
sib 1y ago
I mean, by the numbers in the article, Toyota has produced about $100B of net profit over the 5-year period, while Ferrari has produced $6B. I guess I'd rather own Toyota.
detourdog 1y ago
I’m surprised that the current AI boom isn’t called out in the comments or the article. From my POV technology investing is the poster child for the issue discussed. The internet bubble, online ads, crypto, and AI all fall short of the promise of RoI.
myrandomcomment 1y ago
<FUNNY> Well their job currently is certainly not being a winning F1 team ;) </FUNNY>
aviat 1y ago
Suggest that you consider a Vespa if you want to experience fine Italian engineering. There's no need to hanker for a Ferrari. Saying this as a Vespa owner. Its once of the nicest products I've ever purchased.

75 points by surprisetalk 1y ago

1970-01-01 1y ago

Enzo is rolling in his grave! "I don't sell cars; I sell engines. The cars I throw in for free since something has to hold the engines in." --Enzo Ferrari

FirmwareBurner 1y ago

>“We are not – we are not – a car company. We are a luxury company that is also doing cars.” Replace Ferrari with Rolex and it's basically the same article. Veblen is such a good business model and place to work, if you can hack it that is. Imagine you're a sales guy at Honda dealership, well you have to work hard to convince the middle aged dad why buy a CRV instead of a Toyota RAV4. However, if you work at a Bugatti dealership, you don't need to convince the oil-rich Sheikh why he should buy the 2 million dollar car, he already wanted to buy it before he even stepped in. So not only is your job easier than the guy in the Honda dealership, it's also much better paid. The very definition of inequality. The same is true for other businesses. It's much easier and profitable selling Azure /Office 365 subscriptions to businesses, that some SW solution from a mom & pop shop.

thefourthchime 1y ago
Exactly.
VirusNewbie 1y ago
Ferrari makes money on F1, sells T-shirts and hats and whatnot, along with very expensive cars. Does Rolex have other revenue streams aside from overpriced watches?
- os2warpman 1y ago
  I would never own a rolex because where I live only ambulance chasers, businessmen who are definitely guilty of wage theft, morbidly obese elderly men in gold chains who reek of cigars, and street pimps wear them but from what I can gather they charge approximately $1,000 for a service and a mechanical watch needs servicing every 5-10 years depending on how complicated it is and how often it is worn. So that's like a $100-200/yr. annual subscription to wear an already expensive watch.
  - neogodless 1y ago
    Assuming I take your anecdote at face value, I'm quite impressed at how well you keep tabs on all of the Rolex owners you've met, identified their occupations as well as illegal or immoral activities. I've seen people wearing watches, but hell I have hard time identifying the brand of watch, let alone where the person wearing it works.
    - kulahan 1y ago
      It's pretty easy to spot a Rolex once you know a little bit about them. Get a closer look and it's even easy to spot fakes. However, I agree with the first part of your comment in a way, but it's really not that hard to get a rough estimate of someone based on how they choose to present themselves. They didn't exactly get forced into that look.
      - neogodless 1y ago
        That's a valid argument, that some stereotypical appearances are relatively consistently accurate. Though I'm wondering what, exactly, defines the appearance of a specific lawyer who pushes for accident victims to sue, or businessmen that participate in wage theft. How do you tell them apart from... other lawyers or random people wearing suits?
        no_wizard 1y ago
        I'll say this though, when it comes to corpo execs, at least in the USA, if they think they can get away with some illegal and/or unethical activity and they believe that it won't impact any potential profits (either greater than the punishment or benefits to themselves, because we rarely if ever jail executives in this country or hold them accountable without immense public scrutiny), they'll do that thing 9.9 out of 10 times. Wage theft is rampant here, especially for lower wage workers. The government simply doesn't exist in a capacity to actually prevent these things, and people in general are too apathetic to other peoples well being, let alone engaging in appropriate political discourse, that the needle rarely moves forward for your average citizen.
- davedx 1y ago
  Does Ferrari turn a profit on the F1? I support them and it’s been a while since they’ve had any big wins?
- caycep 1y ago
  Sadly, on my last trip over there, the average Italian Ferrari fan has been suffering akin to a Detroit Lions fan
deadbabe 1y ago
If you cared that much though why not simply get a job selling Bugattis?
- fragmede 1y ago
  They're not hiring. Unless you're the Bugatti dealership's son, or sleeping with him, you're not getting the job.
- kulahan 1y ago
  ...For the same reason anyone can't simply get a job making $250,000/yr? It's not like jobs are something you choose - you request it.
wcfrobert 1y ago
> he already wanted to buy it before he even stepped in. So not only is your job easier than the guy in the Honda dealership, it's also much better paid. Luxury brands spend millions on marketing and brand awareness. In some sense, all the "sales work" have already been done before a person sets foot into a Bugatti dealership. Reputation takes decades to build but just a few missteps to destroy. Brand is way more fragile than people think. As soon as Bugatti stops making great cars, they'll fall into a place where they can't compete in the luxury market, nor the mass market Japanese car brands like Honda or Toyota. In that sense, luxury fashion seems to be a easier market than watches or cars. You don't need an innovative engineering team. Just spend millions on marketing to uphold the common narrative you are a luxury brand. And that shirts with your logo on it costing 10x more than a similar product at say H&M, is not only justifiable, but sensible.
- FirmwareBurner 1y ago
  >Luxury brands spend millions on marketing and brand awareness. When was the last time you saw an ad to buy a Bugatti Chiron?
  - GuB-42 1y ago
    How come you know about the Bugatti Chiron? Did you even saw one for real in your life? The simple fact that you (and me, and everyone else here) know about it show that people in marketing are doing their job. I don't remember seeing an ad for a Bugatti Chiron, I am obviously not the target market, but I stumbled upon an ad for a private jet! Also other luxury cars and watches that make Rolex look like child toys. I was when I worked in a helicopter company and someone picked up a magazine from the showroom where customers get their helicopters delivered. The content was out of this world, I remember an article on the merits of private jets over travelling first class (I guess anything less is unthinkable), with purchase recommendations. So the ultra-rich get their ads too.
  - tolien 1y ago
    > When was the last time you saw an ad to buy a Bugatti Chiron? Ads don't just have to be a photo on a billboard, though, or the entire thing of influencers wouldn't exist. How many times has the Chiron been on Top Gear - I reckon at least three times (I can remember once in the Clarkson era and another time in the Harris/Le Blanc era; the magazine's had one at the Nürburgring at least once)? Sure Bugatti's letting them loose with a multi-million euro car out of the goodness of their hearts.
eschneider 1y ago
It's not a good/bad business so much as a _different kind_ of business, with different engineering/sales requirements and different customers. Neither is better, or more profitable over the long term than the other, but you really need to know which game you're playing.
potatolicious 1y ago
> "However, if you work at a Bugatti dealership, you don't need to convince the oil-rich Sheikh why he should buy the 2 million dollar car, he already wanted to buy it before he even stepped in." Respectfully disagreed. The sales people for veblen goods work extremely hard because competition is intense even within that space. The Bugatti salesman is competing with Ferrari, McLaren, Lamborghini, etc. The margins per-sale are great, but because of your low volumes you experience a lot more volatility. Minor fluctuations in sales have disproportionate impact on your bottom line. I once worked for a luxury real estate brokerage and had opportunity to talk to real estate brokers who dealt in ultra-high-end real estate (the kind of properties that people make YouTube videos about). One conversation stood out to me that's relevant here: I asked him about a listing for a Manhattan penthouse that had been making the news (mid-8-figure buy-in), and his response was that it was an incredibly risky property to represent, because the list of potential buyers is perhaps a dozen people long. If none of them move on the deal then you're holding an absolutely immense albatross. Ultra-high-end goods are generally susceptible to this. Your market is small enough that it doesn't take a lot to existentially threaten you, and there is no shortage of people who want to eat your lunch (just like with any other market).
- no_wizard 1y ago
  >I once worked for a luxury real estate brokerage and had opportunity to talk to real estate brokers who dealt in ultra-high-end real estate (the kind of properties that people make YouTube videos about). One conversation stood out to me that's relevant here Do you happen to have more sharable anecdotes / thoughts around this? I realize its off topic, however I think it still has value to warrant that. I'd be interested in anything you can share about it. I'm curious how the 'day to day' folks see things vs how its sold and told to the rest of us via news magazines or books.
  - potatolicious 1y ago
    It's a super interesting scene, and was a great eye-opener into how the mega-wealthy side of the world goes. A few things that pop into my brain in no particular order: - At the high end, everyone's got a gimmick. You can't just be personable and charming, you have to be so memorable as to feel like some fictional character. Your clientele are expecting more than mere representation, but something/someone who makes their life actively more interesting. - Part of this may have been the market (NYC), but I got the distinct feeling that a lot of this was that buyers wanted a NYC fairy tale. If you're wealthy enough, it's not enough to have an agent, your agent has to spring forth and become a side character in the adventure story of their life. - There's a lot of spilled ink about the mega-wealthy buyers (Middle Eastern oil barons, Russian oligarchs, Chinese billionaires, etc.) but they are a vanishingly small portion of the population of very wealthy people. In general I think most people have a poor appreciation of how little of the ultra-high-end consists of foreigners and high-profile business people that they've heard of. - Related, there are way more wealthy Americans than most people appreciate, and the sources of their wealth are way more mundane than most people suspect. There are more 8-figure luxury condos being sold to families that own car dealerships and trucking companies than tech wunderkinds or petro-oligarchs. By multiple orders of magnitude.
buescher 1y ago
Replace cars with motorcycles,and luxury with t-shirts, and you have Harley-Davidson.
- thefourthchime 1y ago
  No, you can go buy any Harley you want. You can't just buy any Ferrari or Rolex, you have to be invited, usually by buying lower level stuff they want to get rid of.
  - kulahan 1y ago
    Porsche (and I assume others) does this as well. You need something like $1.5M in Porsche inventory before they'll invite you to purchase a GT3 RS.
    - codezero 1y ago
      I know someone with a GT3 RS who owns no other porches. Is this just for new models? (Theirs was a few years old when purchased)
      - gpderetta 1y ago
        Of course Ferrari and Porsche don't control the secondary market, although I understand they might put restrictions on how soon you can sell one of their high end cars.
    - FirmwareBurner 1y ago
      I guess they probably don't want the dirty uneducated "new money" crypto bros, TikTok influencers and OnlyFans hoes spoiling their brand image, they want the well connected Epstein Island elites who come from royalty and old money.

kridsdale1 1y ago

TFA explains the true driving force behind Enshittification. It takes a very strong will to say no to growth and investment, because you know it will make what you do change from excellence in to shit. Sometimes your customer base morphs (see Facebook) and you survive. Sometimes your only market was the high end discerning customer, and now that you’re shit, you’re dead.

bombcar 1y ago
One possible solution to enshitting is to basically franchise. If the market can support 5 of your nice business, instead of growing 5x (which often enshits) spawn four independent copies.
- Wojtkie 1y ago
  How would you franchise out a product like software? I haven't really thought about that before.
  - theyinwhy 1y ago
    White label solution
- pantalaimon 1y ago
  But when you look at restaurants that turn their business into a franchise, quality usually takes a turn for the worse
ToucanLoucan 1y ago
I don't think it's so much that investment does that as leaving your competencies. I've been working at a private firm for years now. The culture is excellent and we use the products we make. We also don't make our product do every last thing it could possibly do, nor do we support every last thing our product in theory could: we focus on what our customers want and buy now. You can't use what we make for everything, but what you can use it for, we lead our industry in. We've grown tremendously but we're still sub-200 in head count and want it to stay that way. We're rolling in profits because we keep our operation lean and responsive. It seems to me the enshittification happens when you try and offer a service to the entire world and can't manage to succeed at that unless everyone and their mother uses it, which itself requires shit tons of employees and IT resources and datacenters, and if it doesn't work out, it all goes in the bin.

trynumber9 1y ago

>why don’t more companies follow Ferrari’s lead Ford did try before. For example, the 2006 Ford GT. In comparison, the similarly-priced Ferrari F430 of the era was the mass market automobile with about 5x as many made. So I wonder how much one should draw from these rationalizations of prestige marketing. At the end of the day Ferrari still uses its larger super-car production capacity to keep even Ford only an occasional entrant into the low-end of market.

ben7799 1y ago
That still doesn't prove anything. The market demand for the Ford GT could have been 1/2 what Ford produced but the market demand for the F430 was double what Ferrari actually produced. I am not saying that is actually the case, but production #s just don't really tell the whole story. Ford only dabbles in these kinds of cars, they have different reasons for picking the # of units they build. They are a lot like Honda, they are not dedicated to this and they instead just build a small # of sports cars every once in a while to try and improve their reputation. The article glosses over the core founding purpose of each company too. Ford was founded to build massive #s of assembly line built cars at a price the average worker could afford. Ferrari very reluctantly built street cars to fund racing and decided the sport/luxury cars were the best way to make the maximum money with the smallest # of street cars. Less street cars meant less distraction from building the racing cars.
- trynumber9 1y ago
  I'm not saying it proves anything but Ferrari is one of the higher volume manufacturers within super cars This applies even compared to many of their competitors we think of as mass market car producers (such as Ford, Toyota, Honda) when they make cars that compete with Ferrari. As you say that's almost entirely due to demand. But the focus should be on how does Ferrari consistently keep such a large portion of the high end car market? Because that's the key to their success. Many companies can make cars that they can sell out in small volumes at Ferrari prices. But they don't see it scaling, while Ferrari does.
  - 1y ago

DrNosferatu 1y ago

My understanding was that Ferrari was in the business of selling a very specific badge, a very specific engine purr, a very specific shade of red and a certain relative level of dynamic performance - the absolute value of this last one changes with time. All this on 4 wheels. Are you telling me that selling branding rights to Acer laptops and to cheap cologne is (an important) part of their core business?

FinnKuhn 1y ago
I wouldn't call about 10% of their net revenue nothing, but also not a core part of their business. I think it goes more towards promoting the brand and image. https://www.ferrari.com/en-EN/corporate/articles/2024-full-year-and-fourth-quarter-financial-results https://www.ferrari.com/en-EN/corporate/articles/2024-full-y...
technothrasher 1y ago
> a very specific shade of red To be fair, Rossa Corsa (i.e. "Ferrari red") has changed significantly over the years.

game_the0ry 1y ago

Enzo is literally projectile vomiting in his grave right now. This is not the Ferrari he created. This is the corpo-monster called "brand". Yuck.

ecocentrik 1y ago

As for stock price, it's not reflective of their core strategy, it's reflective of an explosion in demand that is apparently starting to soften.

toomuchtodo 1y ago

https://en.wikipedia.org/wiki/Veblen_good https://en.wikipedia.org/wiki/Veblen_good

WalterBright 1y ago

Car companies fund racing to sell consumer cars. Ferrari sells consumer cars to fund racing.

OtherShrezzing 1y ago
Ferrari spends $140mn on F1 and brings home $90-100mn in prize money, plus another £150-200mn in sponsorship. Ferrari is a very rare thing in modern motorsport. A team that races to fund racing.
- caycep 1y ago
  the problem with rarified air is that only Ferrari can race Ferraris. Given the low volume, high prices, and resultant engineering issues (cough cough overheating) that wouldn't exist in cars more on the mass market, requiring teams of engineers to support. The average car enthusiast for track days will be seen running Mustangs, Corvette/Camaros, BMW M2/4s, Toyota GR 86s/Supras/Corollas, Honda S2000s, Nissan Z's, etc. But Ferrari is essentially irrelevant. Sadly, I think Porsche is going that way; before, one could also run with the above gaggle with a decent 911 or Cayman. Now that the entry level is climbing well above the $100k mark new, and what was supposed to be their track car (GT3) is approaching Ferrari prices, they are becoming less and less relevant. And they might not even survive the China situation...
  - ojame 1y ago
    I'm not too familiar with the history of a few that you've mentioned, but the Mustang (excluding the GTD), Supra, Carolla, S2000, Z never had track focused cars. For the time-poor and money-rich racing enthusiast, lacking a turn key package isn't really an option. Your local track days where you see the likes that you mentioned - you'll also likely get a few Porches etc too. But there's absolutely a culture of racing higher end cars, the GT3's, Ferraris (488 Pista, 360 Challenge Stradale, starting to see XX's around too), the Valkyrie and Valiant etc. There's also those that grab older Cup cars and track them to the track. There's absolutely a market for turn key, track focused, road legal Ferrari's.
- 1y ago

WalterBright 1y ago

A couple years before Enzo died, there was a TV tire commercial which asked "Why do Ferraris come with Firestone tires? Because Mr. Ferrari wants it that way." and then showed a picture of Enzo smiling. (I don't recall if it was Firestone or Goodyear.)

GoofGarage 1y ago
It was Goodyear, specifically the Eagle VR50. The advertisement featured a Ferrari 308 GTB. Ferrari had only adopted radial tires in racing a decade earlier. I'm curious as to what deal they got with Goodyear at the time, as radial tires (including high performance versions) were already long ubiquitous in the United States by the time that commercial came out, which I believe was actually after the end of the 308's production run.
- WalterBright 1y ago
  Thanks for the correction! I tried googling it, and got nowhere.

bix6 1y ago

My neighbor is a huge car guy and owns everything but Ferraris because “they make you buy all the shitty Ferraris before they’ll let you buy the good ones” :p

caycep 1y ago
granted, even the good ones have issues...Gordon Murray had choice words for the welding quality on the F40s...
bmelton 1y ago
Is Jay Leno your neighbor? I suppose the fact that the #1 car guy in America won't buy Ferrari amplifies the signal that Ferrari isn't actually a car company That they also won't let you modify your cars to your liking (see Deadmau5's fights with Ferrari) is another
- 4gotunameagain 1y ago
  But he has admitted that he likes them and that they are excellent cars, he just not like the whole experience: https://youtu.be/VUPOvcolNZg https://youtu.be/VUPOvcolNZg
  - potato3732842 1y ago
    Jay Leno also doesn't feel a lot of pressure to own those kinds of cars because they're not really what he's into. When you look at what he actually does, he's a collector of and benefactor for the restoration of niche vehicles. It is uncontroversial to say that Ferraris are cars of note. Somebody will save them. His resources are better spent on the stupidly niche things that nobody will care about if he doesn't. So it's easier for him to say "meh, not for me" than it is for someone to whom those kinds of cars are more relevant.
- deleted 1y ago
  [deleted]
fredophile 1y ago
My understanding is that that's pretty common in that part of the car market. I know you can't get the really high end McLarens unless you've bought one of the cheaper ones already.

toyg 1y ago

One should remember that Ferrari was effectively on the verge of bankruptcy for most of Enzo's tenure as leader. Eventually he was forced to sell to FIAT, and spent his last few years pretending that he was free to make the choices that FIAT's owner Agnelli wanted him to make. Ferrari eventually turned a corner once Enzo died. Enzo Ferrari always wanted to make a better Alfa Romeo, and he did. Branding was a side effect that other people exploited later.

pedalpete 1y ago

I'm currently listinging to Founders Podcast - The Obsession of Enzo Ferrari[1] Though some of the points may be correct under current management, I think this quote would have Enzo turning in his grave "We are not – we are not – a car company. We are a luxury company that is also doing cars." This playbook where you put your brand on a bunch of random things to sell, while the prime focus gets watered down only works for a short period of time. Aston tried the same thing, going so far as putting their badge on child strollers. The car industry is going through such upheaval that much of this may not matter in the next 20 years, but I fear they are going to destroy a great brand through a lack of focus. [1]https://open.spotify.com/episode/2O6toYAw3RjjTQ4SEzKIru?si=11841a684ba14b26 https://open.spotify.com/episode/2O6toYAw3RjjTQ4SEzKIru?si=1...

sib 1y ago

I mean, by the numbers in the article, Toyota has produced about $100B of net profit over the 5-year period, while Ferrari has produced $6B. I guess I'd rather own Toyota.

detourdog 1y ago

I’m surprised that the current AI boom isn’t called out in the comments or the article. From my POV technology investing is the poster child for the issue discussed. The internet bubble, online ads, crypto, and AI all fall short of the promise of RoI.

myrandomcomment 1y ago

<FUNNY> Well their job currently is certainly not being a winning F1 team ;) </FUNNY>

aviat 1y ago

Suggest that you consider a Vespa if you want to experience fine Italian engineering. There's no need to hanker for a Ferrari. Saying this as a Vespa owner. Its once of the nicest products I've ever purchased.