Although today there are supercars that surpass Ferrari in quality, performance, and speed, this remains an emblematic brand that sells something that goes beyond the cars themselves. Its brand image is embedded very deeply in people’s minds, associating luxury, speed, and success.
Ferrari is one of the most important brands in the automotive world: it is not only about the millionaire elegance of its products, but also about the high quality of these, both as machines of speed and comfort. But there’s a reason this sports car maker is one of the most profitable companies in the world. Do you want to know why? Read more of this post to find out:
Beginning of Ferrari
Enzo Ferrari was its creator. Initially, he was not interested in producing cars for everyday use, so he founded Scuderia Ferrari in 1929, based in Modena, with which he bought, prepared, and distributed racing cars. At the time, motor racing was in full swing in Italy, so it quickly became an “outpost” within the Alfa Romeo brand’s technical racing, ending with its official racing department in 1933.
So, Ferrari expanded its fleet with Alfa Romeo P3 monopostos (race cars), changed its emblem to the Prancing Horse (explained later in the section dedicated to the logo), and absorbed many famous drivers, such as Tazio Nuvolari and Achilles Varzi.
In 1935, the Ferrari workshop designed and built its first racing car, the Alfa Romeo Bimotore, taking the first steps on the path to becoming an automobile manufacturer, and during 1937 the first ones assembled in their Modena workshop several examples of the Alfetta 158 under the supervision of Enzo Ferrari himself. Due to his talent for this world, in 1938 Alfa Romeo hired him as manager of its new racing department, and this action dissolved Scuderia Ferrari momentarily.
Enzo perceived that what Alfa Romeo was looking for was to neutralize his potential by absorbing him and his Scuderia, since they considered him a strong competitor, for this reason, on September 6, 1939, he abandoned Alfa Romeo under the clause that he would not use the name “Ferrari” in associations or racing cars for at least four years.
Days after his resignation, he founded Auto Avio Costruzioni, based on the premises of the former Scuderia Ferrari in Modena. With this new company he ostensibly manufactured tools and parts for aircraft, and in 1940, he built two examples of a racing car: the Auto Avio Costruzioni 815, based on the platform of a Fiat 508C. It was Enzo’s first car to debut at the 1940 Mille Miglia, but due to World War II the racing market had slowed down and it was no longer a profit for him.
In 1943, the Ferrari factory moved to the city of Maranello, where it has remained ever since. During the war, like all Italian companies and by the obligation of Mussolini’s fascist regime, the company focused mainly on manufacturing grinding machines that were copies of the original German machine tools. The building was bombed by the Allies in 1944 but was quickly rebuilt, and in late 1945, after the war had ended, Ferrari commissioned Gioacchino Colombo to design a new V12 engine.
FACT: The first Ferrari-badged car was the 125 Sport , officially launched in 1947. Enzo Ferrari took the car for its first test-drive on open roads on March 12 of that same year and responded according to expectations, to then take two copies of the model to the Piacenza racing circuit on May 11; one of these copies was driven by Franco Cortese and the other by Nino Farina . This was the first time that a Ferrari-badged car had entered a race and marked a path of success for the brand in major world championships, such as the Monaco Grand Prix.
Enzo Ferrari’s strong personality had helped him run his company and racing team for decades, but it also caused internal tensions that reached a boiling point in November 1961. Longtime Ferrari sales manager Girolamo Gardini did not agree with the participation of Laura, Enzo’s wife, in daily activities.
Both argued about it very often, and these disputes ended up becoming an institutional crisis. Gardini, along with 4 other executives (manager Romolo Tavoni, chief engineer Carlo Chiti, and head of sports car development Giotto Bizzarrini ), made an ultimatum to Enzo, demanding in writing the removal of his wife from him.
The latter, blinded by his character, responded to the fact with the expulsion of the 4 executives and this meant an enormous loss of human capital for the company. The defectors immediately formed a new company, ATS, to compete with Ferrari both on the roads and on the racetracks, taking Scuderia Serenissima, one of Ferrari’s best racing clients, with them.
There was a “big strike” at Ferrari and there was also a particularly difficult time for the company, as its most recent racing models were not up to scratch and were being outperformed by models from other brands such as Jaguar. During this gap, Enzo hired young engineer Mauro Forghieri and race car veteran Sergio Scaglietti.
Both improved on the GTO model, which went to Sebring International Raceway with driver Phil Hill and came in the first place; it continued to win until 1962 and became one of the most famous sports cars in history. These triumphs, and Forghieri’s engineering talents, made the 1960s even more successful for Ferrari than the previous decade.
The big V8-powered Shelby Cobra challenged Ferrari cars in the 1960s, and that’s not to mention that, in the middle of the decade, Ford tried to buy the company, but the deals fell through; even so, the great American automaker ended the dominance of Ferrari prototypes in the 24 Hours of Le Mans championship in 1966, when its GT-40 Mark IIs finished in the top positions.
The 70s came with new challenges. Formerly competing only with smaller cars, the Germans inaugurated a new class of 3-liter sports car prototypes in 1968, with the Porsche 908, while Ferrari followed suit with the 312P model, although this model appeared in very few events.
FACT: In March 1969, the presentation of the 5-liter Porsche 917 , a model of which 25 copies were built in advance, also surprised Ferrari, who that same year responded with 25 advance copies of the Ferrari 512S , financed with the money earned. for a deal he made with Fiat . By this time, Porsche had almost a full season of experience with its new car, and both cars competed in the World Sportscar Championship where Ferrari came in 4th place.
The 1970 season saw epic battles between Ferrari and Porsche; the latter won almost every event except the Sebring. For its part, Ferrari decided to give up the 512 models in 1971 to prepare a new 312PB model for the 1972 season, when only the 3-liter class would be allowed, and thus once again try to outdo its biggest rival at the time.
Fiat: the Ally?
In early 1969, Fiat acquired a 50% stake in Ferrari. An immediate result was an increase in available investment funds, which began work on a factory extension intended to transfer production from the Fiat plant in Turin. In addition, Ferrari was able with this money to start evaluating the construction of new models mostly oriented to the high range.
Not so positive was the effect on labor relations at the Ferrari plant in Maranello. In June, a visiting journalist witnessed a group of workers suddenly leaving a workshop in response to a whistle, this was part of an industrial strike that was beginning at the main plant, although it is not clear whether it was due to poor working conditions. or by the coexistence between the workers and the executives of Fiat. What is known is that control over operations and production increased dramatically as a result of the new influence that Fiat was having over Ferrari.
Conquering Formula 1
Already in the 70s, Ferrari was consolidated as one of the most emblematic racing car brands in the world, it had become extremely popular and, in addition, people associated it with speed, which was what racing fans liked the most. automotive. At this time the company concentrated on developing cars for Formula 1 and enjoyed a successful run on this racing circuit under driver Niki Lauda. Ferrari abandoned other types of sports car racing to devote himself almost entirely to Formula 1.
Let’s jump then to the year 1985 when one of the most emblematic Ferraris appeared on billboards around the world: the Testarossa, which inaugurated a series of models that marked a before and after in the history of the brand, among which were the Mondial convertible and the F40, which was built to commemorate the company’s 40th anniversary. With this, the recognition of the Ferrari brand reached its all-time high.
Death of Enzo Ferrari
But the decade ended bitterly with an event that shocked everyone: the death of Enzo Ferrari. While it is true that the fact was coming, since the man was already very old (he died on February 18, 1988, at the age of 90), it produced a series of important changes, such as the almost total sale of the brand to the Fiat group, specifically 90% of the stake, the appointment of the former sports director, Luca Cordero di Montezemolo, as president in 1991 (in place of Piero, Enzo’s son, who ended up as vice president) and Ferrari’s temporary retirement from Formula 1.
Although the hiring of Jean Todt as sporting director, in 1993, and driver Michael Schumacher in 1996, caused a triumphant return of Scuderia Ferrari to Formula 1 racing, with three victories in 1996, which implied that the period of crisis that ensued from the death of Enzo had been overcome. Also, and as an unprecedented event, Schumacher and Ferrari dominated F1 by winning the World Drivers’ Championship from 2000 to 2004 and the Constructors’ Championship from 1999 to 2004.
The fiat group’s business
In June 2002, Fiat sold 34% of Ferrari to a consortium of banks led by Mediobanca, for a figure of 775.2 million euros. This consortium was also composed of Commerzbank (which obtained a 10% stake), Banca Popolare dell’Emilia Romagna (BPER Banca) (which had 1.5%), and Compagnie Monégasque de Banque (which had 1%). For its part, Mediobanca retained a 21.5% stake and in July 2005 sold, for 114 million euros, a 5% stake to Mubadala Development Company, an investment company of the Abu Dhabi government.
In October 2006, being faithful to the desires it had from the beginning to dominate a significant share of the car racing market, Fiat regained a 29% stake in Ferrari that cost it 892 million euros, but it was not until November 2010 that he was able to recover the full stake he had previously sold by buying 5% of the Ferrari property that belonged to Mubadala Development for 122 million euros.
Once it had regained its supremacy, in October 2014, the Fiat Group announced its intentions to separate Ferrari from its holding company, turning it into a separate business group or “spin-off”, so that in this way it could be listed on the stock exchange. The separation began in October 2015, with a restructuring that established Ferrari NV as the new holding company of the group of companies that constituted Ferrari. In this way, 10% of the shares were taken and launched in an Initial Public Offering with a simultaneous listing of common shares on the New York Stock Exchange.
DATUM: As we have mentioned several times in the articles on brands and companies of Tentulogo, what is in sight seems to be very different from what is woven under the table in the business world. In that sense, although Ferrari has its own potential as a brand, its history is closely linked to that of Fiat and, therefore, to the automobile monopoly of the Agnelli family (its founders), who were behind Ferrari and other automobile brands practically always. In fact, today, the Exor Group (owned by the Agnelli, worth more than $23 billion and the world’s 19th largest consortium by sales volumes), owns almost every car brand it once set out to acquire, including brands that were once rivals. such as Ferrari, Alfa Romeo, etc., and other business groups such as Chrysler and CNH (which produces mass transport and heavy-duty vehicles such as tractors). This means that in today’s Italian automotive sector there is practically no competition, but it is a monopoly.
Interesting historical facts about Ferrari
- In 1908, Enzo Ferrari’s father took him and his older brother to a race in Bologna. It was there that the latter fell in love with racing and since then he wanted to become a driver. This Ferrari dream came true in 1919 when he made his racing debut at the age of 21.
- During World War I, Enzo Ferrari was a blacksmith and pack mule in the Italian Army.
- After a very difficult time in his life, Enzo Ferrari applied for a job at Fiat in 1918, but this company rejected it. Paradoxically, the company Ferrari would later create would be one of Fiat’s most valuable acquisitions in the future.
- In 1985, a brochure of the Ferrari 250 that took part in the Le Mans Championship in the 60s raised £1,070 at an auction in Monaco.
- The most expensive Ferrari ever sold was a 1957 Ferrari 250 Testarossa. It raised 9.02 million euros in a recent auction.
- The Ferrari 250 GTO model is often referred to as “the most sought-after car in the world“, as only 39 examples of it were produced.
- In 2002, Ferrari presented the Enzo Ferrari, a model of which only 400 examples were manufactured… Being a collector’s car, its price ranges from one million dollars per unit.
- All Ferraris that are equipped with a 1.5-liter DOHC V6 engine are named after “Dino” one of Enzo’s sons, who helped design this engine before his untimely death at the age of 24 as a victim of muscular dystrophy.
- The “most expensive car accident in history” involved 8 Ferrari cars and occurred in the southwestern Japanese city of Shimonoseki on December 6, 2011.
- On 12 September 2012, a new Guinness World Record was set when 964 Ferrari cars were assembled at Silverstone UK Racecourse on the same day.
Ferrari Logo History
The Ferrari logo we know today has been virtually the same since the company was founded. It has had nothing but simple superficial changes in the background and in use. It is a black horse on a yellow shield (symbolizes the city of Modena), above it has the flag of Italy and below the word Ferrari with a serif typography, in which the first corner of the letter F in high extends to the height of the last r, just to where the dot of the i begins.
In some uses of the logo, the acronym SF, which stands for Scuderia Ferrari, is added to the shield. The shape of the shield also varies to rectangular for corporate matters of the company and as a stamp for some special models.
Meaning of the Ferrari Logo
The logo has a very particular history and has to do with an Italian aviator, hero of the First World War, who was called Francesco Baracca, who drew on the fuselage of his plane this horse, known as Prancing Horse (and taken from the shield of the German city of Stuttgart), which was used by Enzo Ferrari on the recommendation of the mother of the illustrious aviator as a good luck charm for his cars.
Some sources consulted express that this story lacks an important detail, and it is the original color of the horse in the fuselage of Baracca’s plane, which was red. This, according to him, was changed to black by Ferrari on the occasion of the mourning for the tragic death of the aviator, whose plane was set on fire by enemy artillery during the war. In that sense, if the brand has not talked about this, it is because its executives would not like it to be associated with a disastrous episode.
What is Ferrari like in the field of marketing?
Ferrari’s main marketing strategy is sponsorship. It has an indelible name in Formula 1 racing, which implies an investment of millions in advertising and payment to stars of this sport, through its Scuderia Ferrari. Characters of the stature of the German Michael Schumacher, the Brazilian Rubens Barrichello, the Spanish Fernando Alonso, and the Finnish Kimi Räikkönen have passed through it. It also organizes private races where only cars from its different collections compete.
Ferrari also uses demographic and psychographic segmentation strategies to delimit its target group, which has been selectively targeted at individuals with medium-high purchasing power. Its goal as a brand is not that everyone owns a Ferrari, but rich and celebrities, something that helps it in the application of an “aspirational” strategy that involves more and more buyers wanting such an exclusive product.
Now, when we say that “not everyone” can have a Ferrari, we do not mean that the company puts certain conditions (as Rolls-Royce does) to access any of its vehicles; we refer mainly to prices, which do not fall below $ 230,000 when it comes to new copies. In that sense, anyone who has the necessary purchasing power to access products in this range can have a Ferrari.
And while it has positioned itself as a manufacturer of luxury sports cars closely associated with the most renowned racing events around the world, in general, it usually has more affordable examples than those of brands such as Lamborghini or Rolls-Royce. We could even compare it to Mercedes-Benz, although the latter does not necessarily specialize in sports cars.
DATUM: To maintain its high prices, Ferrari, in addition to relying on a strong brand presence (advertising), has maintained a very controlled annual production, making use of that law of the economy that indicates that scarce products are more valuable as their demand increases. This, which means very low operating expenses and high profits (around 500 million euros per year), makes Ferrari one of the most profitable brands in the world. In fact, in 2017, Forbes magazine placed it in eighth place on its list of the most profitable companies of that year. According to the Brand Finance Global 500 2019, it is the most powerful brand in the world, a title it has not obtained since 2014.
This is how Ferrari has conquered the automotive world and has become, perhaps, the most representative and well-known sports car brand of all, making us want to have some of its products at some point in our lives. Example of success and knowing how to do things well.