The risk is that by being a little less aloof and a little more ubiquitous, Ferrari might tarnish that famous brand and make us want its cars a little less. And the strength of Ferrari's brand, and what it does with it, is of immediate importance. Morgan Stanley values Fiat Auto, which manufactures more than two million cars each year and makes about an $800 million profit, at $3.9 billion. It values Ferrari, which is 90 percent owned by Fiat and makes more than 6000 cars each year and about $400 million in profit, at $4 billion. That's partly due to the bankers' belief that Ferrari's profits will grow, but it's also partly due to what one called the "magic dust" of the brand.
Those numbers aren't just academic. Fiat is seriously considering a Ferrari IPO to raise the cash to take control of Chrysler. You might not be able to afford the cars, but you might like to buy your own little slice of the company. But what will you be buying? What is Ferrari? Is it a Formula 1 team and a supercar maker, or is it a marketing machine?
Knowing how much it earns from each activity would give us the answer, but Ferrari won't tell, and nobody else knows. "We know exactly how much the other activities are worth, and it is significant," said Ferrari managing director Amedeo Felisa when I asked him. "But if I told you how, you'd be able to work out how much we make on the road cars and how much Formula 1 costs us. And then I'd lose my job, and I have a family."
Max Warburton, the respected London-based automotive analyst with Sanford C. Bernstein and a man known to have the ear of Fiat CEO Sergio Marchionne, doesn't know, either. "They've never revealed it. Some people talk about Ferrari's noncar activities now being 30 percent of its revenues, which seems on the high side to me, but it could be that this new theme park is a game changer."
However the numbers break down, they look good. In the third quarter of 2010, the last period for which Ferrari reported, car sales were up four percent over the same period a year ago, but overall revenue was up thirteen percent and profit 46 percent. Investors seem to like those numbers. Volkswagen's Ferdinand Piëch, sitting, in Warburton's words, "on a $20 billion cash pile they acquired by a combination of luck and judgment and don't know what to do with," wants to buy it outright, despite already owning Porsche, Lamborghini, Bentley, and Bugatti. The Middle Eastern sovereign wealth funds are also interested in acquiring another trophy asset. They don't seem to care whether Ferrari sells more cars or baby clothes. But we do.