Is it Smart or Childish?

02.03.16 - Ferrari CEO Sergio Marchionne

We hear announcements nearly every day from some company head that gives us an idea of where their mindsets are and what their company values hold. Sometimes these announcements and bold statements end up offering us a look at the end of the company while at other times we see the importance of protecting a brand signature and the what the company stands for. The difference between the two often is the strength of the company and where the market is headed in any industry.

For Ferrari the announcement came right from the top, CEO Sergio Marchionne, who stated clearly that Ferrari would not entertain the idea of an SUV with their name on it. While we can all admire the thought of standing on your values and continuing to focus on bringing some of the most impressive super sports cars to the market that we have ever had to enjoy this might be a direction that the Ferrari CEO should think again about and reconsider.

What is the argument for Ferrari to make an SUV? First of all the old “if everyone else is doing it” mentality is often prevalent in the automotive world. So far we see Porsche, Bentley and Lamborghini all making SUVs with Bentley and Lamborghini preparing to show off their first models soon and Porsche having been in the market with SUVs since 2002. Another reason to get in on the action is the fact that the stock price for Ferrari is at an all-time low. Since they separated from FCA and offered their own IPO the price has continued to drop at an alarming rate. Even if these two reasons aren’t enough the projection is that the growth of the market is expected to slow down in 2016 which doesn’t bode well for a car company that builds only one type of car; the super sports car.

It’s almost amazing that Ferrari is being as stubborn as they have embraced the turbocharged engines long before Lamborghini ever did. In fact Lamborghini still holds to the ideal that turbocharging doesn’t belong in a sports car but is fine for an SUV while Ferrari has filled its sports cars with turbocharged engines for a few years now. So why does the Ferrari chief feel like he needs to be so adamant that they will never build and SUV, at least not while he is in charge?

This really boils down to sheer childish stubbornness and should be considered by Marchionne and his team. This may be a response to the fact that Lamborghini is about to put its first SUV on the market in 2018, but the benefits of this action should outweigh any negatives. The expectation for Lamborghini is a doubling of sales and revenue while using a turbo and a hybrid powertrain to make for a great menu of SUVs that many of their customers will love. Ferrari could easily experience the same increase in revenue if they would get out of their own way and embrace the market which says more drivers love SUVs than anything else.

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