Sergio Marchionne Thinks He Knows Why Ferrari Stock Has Soared By 98%

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And it isn't because of horsepower or lap times.

Ferrari can't seem to get anything wrong these days aside from new designs that seem to dig too far into Alien vs Predator look book for inspiration on what the future looks like. It's success is most obvious when looking at sales numbers-maxed out at an all-time high of 9,000 units per year-as well as in the boom of its stock price since the company went public in October 2015. The reason investors love Ferrari, according to what CEO Sergio Marchionne told The Street, is because of the way consumers see the company.

According to Marchionne, Ferrari makes more than fast cars for the elite, it manufacturers a lifestyle that everyone wants to be a part of. It's this prestige that's given the markets reason to boost Ferrari's share price by 98% since the IPO. "I think it has been confirmed by the performance of the stock in the marketplace, but more importantly the financial performance we've had since we've taken it [the company] public, that Ferrari as you know it isn't a car-maker," Marchionne said. "Ferrari happens to make cars, but it makes luxury goods for a select group of people who cherish belonging to an exclusive club for our users -- that's a different argument than making cars."

Despite its success, Ferrari finds itself in the middle of an awkward bind. Previously, the company has chalked its brand success up to high demand for a product that's supply was kept artificially low. Owning a Ferrari meant the owner was able to pull strings to get one, which is better than just having the money to buy one. With the market pushing Ferrari to meet demand with high production numbers and a more diverse set of options (like a Ferrari Utility Vehicle), that brand prestige is under threat. However, Ferrari has quite a large demand to fill before it's building at surplus levels, so investors and fans alike can rest easy. On the other hand, one aspect of that expansion involves pushing past production caps imposed by regulators.


Once these are surpassed, Ferrari would be forced to cut its average fleet emissions by building hybrids and downsizing engines even more than it already has been. How's that for selling out?

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