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Just posted a blog on a few topics including the soon to be launched Ferrari SUV, Aston Martin DBX update, Ford GT, Flipping McLarens, and the Micro Manufacturers, GMA, SCG, De Tomaso etc. Here's the link to the article:


Thoughts? Comments? Should Ferrari launch an SUV? Should McLaren require a minimum holding period for Ultimate Series and Limited Edition Cars?
 

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@Boxer,

Once again you have widened my scope and perspective of all things happening in the supercar and hyper car realm of manufacturing and ownership.

Love reading your automotive news and perspectives!
 

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I don't think the market for Lambo SUVs is the same as the market for their supercars, esp in Asia will contribute to the majority of growth in the coming years. In some areas you cannot walk a street corner without seeing a Urus, Bentayga, or London taxi. Based on the depreciation curves in America, dmeand for the Urus is still extremely high. In my opinion the vast majority of market for these cars is from non-supercar buyers who are new to the brand, and any existing customers are filling a different role in their garage. Far better to make 5000 units a year of a car to fill a separate market and maybe piss off some of your existing customers (who cares when there are many in line waiting to take their spot) than make 5000 additional units of your existing lineup diluting their scarcity, pissing off all your existing customers. Additionally if they hit the right price point Ferrari's brand equity will allow their SUV to cannibalize other brands luxury SUV sales, and there is no danger of oversaturation as their production is limited to 5000. Also re development costs and profit margins, I believe the chassis is off the Roma/Portofino platform. The only danger in my mind is the impact on brand equity, but if Porsche didn't have a problem with the Cayenne, nor Lamborghini with the Urus, I think Ferrari will be fine.
 

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I dont think the demand for ferrari will change with an SUV, it will likely eat into their FF/Lusso a bit, but will only steal from other lux SUVs, but depending on what price level it may introduce a lot of other folks into the brand. Hoping they will want the mid engine car/then their kids will stay with the brand.....
crypto millionaires/influencers/new money will need family cars soon LOL.
 

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@Boxer, thank you for sharing. Great write up as always.

It pains me to see the Ferrari SUV path. My perspective is similar to yours as I think it dilutes the brand in the long term. I see it as a case of misaligned incentive for decision makers. I suspect they are aware of the implications but the personal benefits outweigh the “what’s best for the brand”. However, I might be not willing to see the future though as the Ferrari brand might have to change significantly to be relevant in the future of no more pure internal combustion engine cars. So, it could be a good path from that POV.

I know of a 765LT that has changed hand twice already. While Ferrari’s method is relatively effective, it has potential downsides too. In reality, speculators are part of the market. I’d love to see better ways to get cars to enthusiast but I don’t have high expectations that it will happen.
 

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I think calling a car on stilts an SUV is not cool. It's a high performance crossover or I guess real SUVs are trucks now and the Americans finally make sense.
 

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a few high end marques have suv's so why not ferrari......
this will bring new status symbol buyers into their brand . As we know,this worked very well for porsche(not really exotic brand but still...) and lambo.
 

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a few high end marques have suv's so why not ferrari......
this will bring new status symbol buyers into their brand . As we know,this worked very well for porsche(not really exotic brand but still...) and lambo.
but didn't work for Bentley and Maserati. Jury is still out on Aston.

Also for Porsche, they did have a first mover advantage....by almost 20 years.
 

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but didn't work for Bentley and Maserati. Jury is still out on Aston.

Also for Porsche, they did have a first mover advantage....by almost 20 years.
Bentley cannabalized on their own sales with the Bentyaga. They offered a car that was in philosophy the same as their other cars (luxurious, fast in a straight line and extravagant). Lamborghini offered the Urus which was completely different from their other cars and therefore the Urus brought in new types of customers instead of making current customers switch to the new model (at least not in an exclusive manner). This is pure speculation but the Aston Martin DBX and the Rolls Royce Cullinan (400k car this one) may prove to show how these luxury cars are falling out of favor as over recent years they have highlighted the type of buyers that go for these cars...not a group a lot of us want to be a part of and I dont mean "rich" by that
 

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didn't work all that well for bentley and some others as the product is too close to their previous offerings me thinks.
would explain why urus is doing well and foresee ferrari raking it in with theirs too, even more so as the name sounds even more exclusive.
and if hybrid and or diesel, i will lol! the various carbon taxes in europe would be the only roadblock.
 

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A few comments on your blog:

- Ferrari have the classic dilemma of any company that has done a fairly recent IPO. Once the initial IPO excitement has evaporated, and the momentum that the company exploited for the IPO timing has run its course, the management feel the need to find ways of growing earnings. Under private ownership it might have been perfectly acceptable for the company to generate steady, annuity-type earnings, but public owners (that is, absentee owners who are in it only for a financial return and couldn't care less about how it is generated) demand earnings growth forever.
Could the Ferrari cachet (which is 95% utter bullshit, but the same applies to most luxury brands) be maintained if they were populating the streets with twice as many Portofinos as today, but they were all battery powered? That seems unlikely. Unless future electric Ferraris are going to generate artificial flat-plane crank noises (and presumably even most Ferrari owners would be put off by the disingenuousness of that), the company are going to need to find new ways of growing revenue in a world in which not only are ICEs bad but fast cars per se are bad and one signals one's virtue by either cycling, taking public transport, or moving about in shared-ownership, self-driving pods.
To justify a $40b market cap, you need a lot of earnings. With all the negative factors heading Ferrari's way, they cannot merely fine-tune their traditional strategy.

- Aston. I'm glad that you are pointing out what almost nobody else has had the insight to remark: this is not an Aston Martin 'works' F1 team. There is no such thing as 'Aston Martin racing' and has not been for decades.
The notion that the team currently known as 'Aston Martin Cognizant F1 Racing' has Formula One racing roots extending back to 1959 is just more BS from Lawrence Stroll and his team of t-shirt marketers.
The rather successful 'Aston Martin Racing' effort in GT endurance racing in recent years likewise has had nothing to do with Aston Martin the car company. The so-called 'Aston Martin' GT racing cars are designed, engineered, and built by, and at races run by, Prodrive, a completely different company whose origins are in rallying and whose only connection to Aston Martin is that Aston Martin pays it to make racing cars that Aston can pretend are its own.
In Formula One, Aston Martin is nothing more than a sponsor - the same as UPS, Ray-Ban, Citrix, Ineos, Hilton Hotels, and other great 'racing' companies.

- Speculators, flippers, etc. It seems to me that the solution is for manufacturers to build to demand, rather than to create artificial shortages.
The alternative would be for a manufacturer to commit to a limited production number but then to auction off the allocation slots. The same ultimate owners should end up with the cars, but the middle man whose only function is to take advantage of insider knowledge and connections and then disrupt the process would be eliminated.
 

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Discussion Starter #13
A few comments on your blog:

- Aston. I'm glad that you are pointing out what almost nobody else has had the insight to remark: this is not an Aston Martin 'works' F1 team. There is no such thing as 'Aston Martin racing' and has not been for decades.
The notion that the team currently known as 'Aston Martin Cognizant F1 Racing' has Formula One racing roots extending back to 1959 is just more BS from Lawrence Stroll and his team of t-shirt marketers.
I am surprised that more people haven't called Stroll out on this. It actually reeks of self dealing. He is using a public company to help fund his private company (and in the process pay some of the costs of his son's mid pack racing career).

While it suits Strolls needs to link the two companies together right now from an image standpoint, not merging them gives Stroll the ability to sell the F1 team off as soon as Lance's F1 career is finished and protects his investment in the F1 team in case the car company ends up going bust (for the 8th time)
 

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I am surprised that more people haven't called Stroll out on this. It actually reeks of self dealing. He is using a public company to help fund his private company (and in the process pay some of the costs of his son's mid pack racing career).

While it suits Strolls needs to link the two companies together right now from an image standpoint, not merging them gives Stroll the ability to sell the F1 team off as soon as Lance's F1 career is finished and protects his investment in the F1 team in case the car company ends up going bust (for the 8th time)
Correct. If Stroll and his consortium own 1/6 of Aston Martin Lagonda the road car company, he is getting other people to pay for 5/6s of the sponsorship costs.

Of course, this is the sponsorship package that, until a few months ago, was instead attached to the Red Bull team. Which deal do you reckon will give Aston higher-quality publicity - 'Max wins again' or 'Seb/Lance screws up again'?

Then again, Aston Martin Lagonda is itself still a shit show: Mercedes-Benz technology at twice the price and with half the build quality.
 

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Correct. If Stroll and his consortium own 1/6 of Aston Martin Lagonda the road car company, he is getting other people to pay for 5/6s of the sponsorship costs.

Of course, this is the sponsorship package that, until a few months ago, was instead attached to the Red Bull team. Which deal do you reckon will give Aston higher-quality publicity - 'Max wins again' or 'Seb/Lance screws up again'?

Then again, Aston Martin Lagonda is itself still a shit show: Mercedes-Benz technology at twice the price and with half the build quality.
Hard to believe no ones called him out on the sponsorship.

On Red Bull vs. AM Racing Stroll, I think its hard to say, I dont think anyone ever heard anything other than "Red Bull" or gave any credit/halo to Aston Martin last year. On the Seb/Max "guess which one ran into the back of Ocon" new Aston Martin F1 Team, Stroll at least does have the majority of the world fooled into thinking it has something to do with the road car company.

Really like this: "Mercedes-Benz technology at twice the price and with half the build quality." mind if I use it in a blog?
 
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