The Prancing Horse is now worth more than ever.
Ferrari's former chairman, Luca di Montezemolo, enforced a strict 7,000 vehicle production cap per year. Raising that number, he feared, would dilute Ferrari's value and weaken the brand. It's a fair argument that's since been proven wrong. The Detroit Bureau, citing a recent study by Brand Finance, reports that since Sergio Marchionne took over and increased production to 9,000 units annually, as well as Ferrari's IPO and the upcoming opening of Ferrari Land in Spain, the brand's commercial value has surged "by 40 percent to $6.15 billion."
That's just for this year and it's very impressive, especially for an automaker that caters only to the wealthy. To give you a better idea about this accomplishment, Toyota, currently the most valuable auto brand, increased its value by 7 percent, for a total worth of $46.3 billion. Point being, a 40 percent jump on Ferrari's part is incredible. Another automaker whose brand value surprisingly increased is Volkswagen. Yes, seriously. The same study claims VW is "up by 32 percent to $25 billion," a clear sign that its post-Dieselgate recovery is going just fine. However, Chevrolet, Ford, Honda, Hyundai, and Nissan all declined in the Brand Finance rankings. Interesting.
And just to clarify, brand strength "is used to determine what proportion of a business's revenue is contributed by the brand, which is projected into the perpetuity to determine the brand's value." As for Ferrari, Marchionne's hunch that a 2,000-unit annual production increase wouldn't hurt the brand overall has proven correct, at least for the time being. People want more new Ferraris, and Ferrari seems to have found a better supply/demand balance.