Ferrari soared to great heights after its IPO and officially managed to become the most valuable automotive brand in the world.Controversial as it may seem, Ferrari is sort of losing the plot. While Ferraris were always reserved for the affluent, there was a zest in them that’s missing these days. Ferrari has gone from making some of the most exciting cars to a luxury brand that churns 15 models every week.We cannot overlook the investor sentiments at play and how it’s influencing the company. That aside, Ferrari has seen its sales drop in the previous fiscal year. As per Best-selling-cars, in the calendar year 2020, worldwide sales of Ferrari dipped by 10% to 9,119 cars sold.Needless to say, the downward trend would’ve taken a toll on the company’s financials. The cause? Well, the worldwide shutdown thanks to COVID. Honestly, the microscopic vermin did more harm than nuclear bombings.Things would bounce back without a doubt. The prancing horse will soon gain the lost traction and make up for the losses. After all, Ferrari has the most margin per model sold out of all the luxury carmakers.Aside from the global sales, the pandemic-driven economy saw Ferrari’s business dip in the US as well. Here’s a closer look.

Ferrari: Why Sales Went Down In the US?

Ferrari 488 Pista
Via: Alexander Migl, Wikimedia Commons - https://creativecommons.org/licenses/by-sa/4.0

If we were to look at the stats, as per the website, Ferrari’s sales in the US went from 2,900 units in 2019 to 2,325 in 2020. This translates to a 25.5% dip in overall sales. China also saw a dip of nearly 50%. In 2019, Ferrari sold 836 units in China, Hong Kong, and Taiwan but saw sales drop by nearly half to 456 units in 2020.

Ferrari sales in Europe and the Middle East were fairly stable with most of the damage done in the very important US and Chinese markets that saw the pandemic hit severely.

ferraris-prancing-horse
via uk.motor1.com

In other news, according to Forbes, the brand seems to have exceeded analyst’s expectations. In their financial report, Ferrari’s earnings before interest, tax, depreciation, and amortization (EBITDA) fell 10% to $1.4 billion. However, analysts expected the brand to rack up $1.3 billion, which it obviously surpassed.

In order to bring some relief to its investors, Ferrari said in 2021, EBITDA would rise to between $1.7 billion and $1.8 billion. Not too ambitious given the rich are flocking to buy post a year of zero spending, says PYMNTS.

There is also another reason, and that is Ferrari is losing out on the SUV space. Lamborghini just recorded its best-ever start to the year and has cars flying out of showrooms. However, the majority of those cars are the Urus model, which is by far the best-selling model in Lamborghini history. Ferrari seems to be losing a big chunk of sales to its Italian brethren and fierce competitor because of this.

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What Made Ferrari An Icon

https___cdn.cnn.com_cnnnext_dam_assets_170328115318-01-enzo-ferrari-file
via edition.cnn.com

If you’re to look at the past, Ferrari started off as a racing team that competed across various events in and around Europe. As with racing and life in general, you’re not going to win everything you enter. Ferrari was pretty successful but wasn’t big with tons of money or influence to back their venture.

Now, Enzo being an optimist decided to favor one of his friend’s suggestions and decided to manufacture road cars and transfer the proceeds into his racing program. Ferrari launched their first road car the 125 S in 1947 and marked the entry of a brand that would later become a symbol of speed, luxury, and wealth.

ferrari-250-gto-1
via rm sothebys

In 1969, the brand took off after Fiat taking a 50% stake in the company. This improved cash flow and helped Ferrari release more road cars and gain a strong foothold.

It didn’t take long for Ferrari to establish itself as the go-to brand if you have deep pockets. Ferrari rose to become the symbol of stature and opulence that if you owned a Ferrari you most certainly have made it in life. Every Ferrari that comes out of Maranello is built to an individual customer's specification. In this sense, each vehicle is a unique result of a specific client's desire.

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Ferrari: The Future Is Sustainability

2019 Ferrari SF90 Stradale, red on freeway, Ferrari
Ferrari

We know how legislation is forcing automakers to muffle sounds and reduce emissions. But, the impact a low-volume manufacturer has on these is debatable. Objection to the sound bit is acceptable. Regardless, the move towards a greener future has already started to take shape.

As starters, we have the massively powerful Ferrari SF90, and the recently unveiled light and nimble Ferrari 296 GTB. Even Ferrari has stated that the brand is expected to go Carbon-neutral by 2030.

Ferrari 296 1
Via Ferrari Official Website

While we certainly doubt the viability of electric mobility, it happens to be the immediate solution. Strapping many batteries to the underside could result in Polar bears having a cheerful evening. However, as an enthusiast, Ferrari should think about other forms of sustainable propulsion. We know Hydrogen as a combustible fuel is becoming a huge rival to electricity along with Fuel Cells.

Porsche’s experimenting with synthetic fuels, which makes sense as sports cars are not just about speed. Drama and sense of occasion play a crucial role in making them covetable. As a brand that speaks profoundly about passion and flair, we hope Ferrari finds a way to keep the emotional aspect of motoring alive.

Sources: Forbes, Ferrari, YouTube