Ex-chief warns stock offering may hurt Ferrari
Legendary Ferrari Chairman Luca di Montezemolo, who stepped down from his post last September, had a stern warning for his former employer as Fiat Chrysler Automobiles prepares to spin off the exotic supercar company with a public stock offering.
Di Montezemolo noted that publicly traded companies are often pressured to put profits and sales volumes over the value of the products and customer satisfaction.
"I hope that the clients will remain more important than the analyst or the investor or the financial markets," di Montezemolo told several reporters before he was inducted into the Automotive Hall of Fame in Detroit recently.
Di Montezemolo, next to founder Enzo Ferrari, is widely viewed as the man most responsible for Ferrari's success on the Formula 1 racetrack and its evolution into one of the world's most recognizable brands.
His induction into the hall of fame occurred on the same day Ferrari filed a prospectus with the U.S. Securities and Exchange Commission, making its plans to offer 10 percent of its stock for sale to the public official. The remaining 80 percent of the shares will be sold to Fiat Chrysler shareholders, while the last 10 percent of Ferrari is owned by Piero Lardi Ferrari, a son of the founder.
Fiat Chrysler's plan to spin Ferrari off into a standalone company is part of CEO Sergio Marchionne's plans to generate cash to fund Fiat Chrysler's five-year growth plan.
Di Montezemolo left Ferrari in October after clashing with Marchionne over Ferrari's racing program, its global growth strategy and the IPO plans. Marchionne has said Ferrari could sell as many as 10,000 cars per year without damaging its exclusivity compared with the 7,200 it sold last year.
Ferrari, in its prospectus, said it plans to pursue "controlled growth in developed and emerging markets" by adding dealerships and expanding its licensing agreements as it protects the exclusive nature of the exotic sports cars it makes. It promised to retain exclusivity as a core part of its strategic plan.
Di Montezemolo said Ferrari became a great company because of its dedication to "people, products and clients," as well as its dedication to "exclusivity in terms of number of cars, exclusivity in terms of how you deal with the clients."
That model could come under pressure from Wall Street if Ferrari is a publicly traded company.
"I hope that the client will remain the most important point of reference," di Montezemolo said. "Because if not, it will be a big mistake. Because, I always say, 'our people, our products, our clients.' These are the key elements."
Di Montezemolo also reflected on his induction into the hall of fame, his career achievements and his view as a director of Formula One group. The following comments have been edited for brevity and clarity:
On his career:
"I had a fantastic experience together with such unbelievable men like Enzo Ferrari. Then with [legendary car designer] Sergio [Pininfarina] we did many cars, many, many cars. I used to fight with him, fight in a nice way ... we made in my opinion fantastic cars, and he has been the best designer in the world, in my opinion, for cars."
On his priorities while running Ferrari:
"Behind fantastic products, there are fantastic people. And you know for me, there are three priorities: number one is my people, number two is product — because to do great products you need people — and number three is the client, to have the client the center of our model."
On the Ferarri LaFerrari, a hybrid supercar that was limited to production of 499 cars:
"What I like when you see LaFerrari is that it has had a fantastic success because we were very, very keen to maintain exclusivity — to do far less cars than what the market demanded."
On his induction into the Automotive Hall of Fame:
"I am also very pleased because this prize is here. It is in the capital of the automotive [world]. When I was a kid, Detroit meant Ford, it meant General Motors. A prize like this is important because Enzo Ferrari got this and Sergio Pininfarina as a designer, and today myself. So it also is in the Hall of Fame, how the Ferrari community is represented.
On what it would take for Formula One to be fully embraced in the U.S.:
"What is important is to do a program to have Formula One in the U.S. and this has to be done in a very professional way ... to create the proper preparation to launch in a proper way Formula One in the U.S. That is one of the key priorities.
"I think one of the elements that has to be improved is the relationship between the drivers and the public. The drivers today are too isolated. ... We have to look at the future in the U.S. with a project taking into account the characteristics of the culture. If you import Formula One into the United States as it is, it would be a mistake."
So how long before Formula One could be relaunched to the U.S.?
"Five years. We need a five-year program not only for the States ... to have a strategy, marketing, new technology, social media — the whole program."