Why is Ferrari no longer (just) a brand that sells cars?

There's no doubt that Ferrari is a brand that makes cars that are used to move (quickly) from point A to point B. But it's not a typical car manufacturer, as its customers buy more than just a car when they buy one. The brand sells an emotional and social intangible that goes beyond its fantastic cars.

Ferraris are dream vehicles, with heart-stopping performance and spectacular design. Despite being true monsters of the road with spectacular sporting capabilities, they are built to become objects of admiration and social status, and this is the great value of the Italian brand. Curiously, a Ferrari customer doesn't want to buy one of their cars to go flat out on a mountain road or beat the clock on the racetrack, as they understand the product they buy as a display of their power, as a good that serves to demonstrate their financial strength. In other words, Ferraris are exceptional machines, but their buyers have no intention of squeezing them or extracting all their essence and power on the road when they buy one.

Throughout the 21st century, Ferrari has become a purveyor of luxury goods, much like Prada or Gucci. A brand valued not so much for the equipment, performance, and technical capabilities of its vehicles as for being an expensive, exclusive, limited, and affordable product. However, this paradigm shift is relatively recent, as the first to understand the new business model was Luca Cordero di Montezemolo, president of the brand from 1993 to 2014, and the person ultimately responsible for a business model that founder Enzo Ferrari hadn't even considered. For the founder, manufacturing cars was a means of obtaining financial resources to compete in Formula 1 or the 24 Hours of Le Mans, and he was never interested in turning the brand into a kind of social showcase to make money.

But after Enzo Ferrari's death, and now under the Agnelli family's control, the brand's executives changed their priorities, and now the racing division is a subsidiary of the commercial division, where the brand's shareholders make money and profit. Without going any further, Ferrari has gone eighteen long years without winning a Formula 1 drivers' championship and seventeen seasons without winning the constructors' title, a reality that would embarrass and anger Enzo Ferrari beyond belief. But over the past twenty years, the brand has continued to grow and make a lot of money, turning Scuderia Ferrari into a kind of luxury embassy around the world rather than a champion Formula 1 team. It's clear, then, that Ferrari's business isn't about making fast cars or winning championships.

Center on exclusivity

The Maranello brand has understood that limited and exclusive editions of its cars are a huge source of revenue, as its customers don't hesitate to purchase the product (regardless of its price) to own an exclusive product that will appreciate in value over time. But it's also true that these customers themselves line up to buy the brand's new models (especially the most exclusive units) to deprive other customers—who are equally or even richer, and who, for whatever reason, cannot afford them—of getting them.

Ferrari doesn't sell its cars to the first person who comes to the dealership, and having a lot of money isn't enough to buy one. Boxers like Mayweather have been among the illustrious individuals banned by the Italian brand for image or product protection reasons. This exclusive factor allows Ferrari to select a series of special clients to invite to participate in events and build loyalty with the numbered cars it will produce. This creates the apparent contradiction that when Ferrari presents a unique car—or a limited number of units—the brand has already sold out.

Ferrari's commercial strategy allows for a series of millionaire customers loyal to the brand, collectors of all the manufacturer's standard models (which aren't cheap cars either) who can access, by invitation, one of its exclusive, limited-production models. Although the strategy seems simple to understand and easy to imitate, the reality is that no other car manufacturer has been able to replicate Ferrari's success. While it's true that Aston Martin, Lamborghini, Porsche, and McLaren have also developed one-off or short-production models, their auction sales value has never appreciated as much or come close to the stratospheric prices of Ferraris, nor do they have a group of loyal customers willing to buy them.

Throughout 2024, Ferrari broke its registration record: 13,752 units manufactured and sold. But current vehicle demand would allow it to absorb all the production that the brand's more than 5,000 employees in Maranello are capable of. Ferrari is surely the only manufacturer capable of selling as many units of its products as it is willing to manufacture at the price it deems appropriate. This reality explains why the brand's net profit at the close of last year was more than €1.5 billion, and the brand's global stock market value surpasses automotive giants such as the Renault Group and Stellantis, among others. In short, stratospheric figures for a car manufacturer that, at its core, sells something other than (just) cars.