When Ferrari was founded, it was just a racing team. Its history holds many great insights and has had its ups and downs over the decades. Let's take a look at the challenges and how the Ferrari team has overcome them. From the past to the present, this is the growth story of nearly century-old Ferrari.
Even though it's no longer the age of cars, there would be few that haven't heard of Ferrari. From movies to tv and music videos, car shows, Formula 1, and other sporting events, Ferrari is engrained into world culture as an Italian symbol of luxury and wealth. In 2015, Ferrari reached a market value of $10 billion when it went public on the New York Stock Exchange. Fast forward to today, and it holds a market value of $30 billion.
A few key facts about Ferrari:
Founded in 1929, a company, Scuderia Ferrari, was set up in Modena by Enzo Ferrari to sponsor amateur racing drivers. Racing cars were purchased, prepared, and fielded by the Scuderia. The company quickly became Alfa Romeo's technical-racing outpost and took over as its official racing department when Alfa Romeo ceased to operate its own team in 1933. Until 1938, many successful drivers were prepared and raced at Alfa Romeo. Alfa Romeo brought its racing operations in-house again in 1938, forming Alfa Corse in Milan and hiring Enzo Ferrari as its new racing manager. During the same period, the Scuderia Ferrari racing team was disbanded, which forced Enzo to leave Alfa Romeo. As part of his agreement to leave Alfa Romeo, Enzo Ferrari promised not to use the Ferrari name during the next four years.
Having to refrain from racing during the Second World War, he manufactured aircraft parts and other technical products. Ferrari’s factory was moved to Maranello in 1943, but was bombed in 1944 and not rebuilt until 1946.
The first road-going Ferrari, the 125S model with a 1.5-liter V12 engine, was produced in 1947. The aim was to use the proceeds to support Enzo's racing team. Soon, road cars became popular as well. This was helped by the fact that the bodywork of the Ferraris was designed by famous design companies such as Pininfarina, Bertone, Ghia, and Touring. The Ferrari became a cult car among young multimillionaires, and the small production runs were quickly sold out despite the long waiting periods.
Ferrari's were typically equipped with small-displacement V8 and V12 engines, usually of mid-engine design. Until the mid-1980s, Ferraris were generally quite unreliable and required frequent maintenance. This was considered by enthusiasts to be a special "character trait" of Ferrari.
The strong personality of Enzo Ferrari was essential to the success of his company and his racing team Scuderia Ferrari over the years. In November 1961, internal tensions reached boiling point. Enzo’s wife was involved with the company for a long time, arguing with high managers Gardini, Tavoni, the chief engineer Carlo Chiti and the head of experimental sports car development Giotto Bizzarrini. Ferrari was issued an ultimatum, demanding in a letter that his wife be dismissed from the company. As a result, Ferrari called a meeting and dismissed all managers involved.
All the above employees were key managers and experts in their field, which meant a significant loss for the company. A few months later, the "fired four" formed their own company, ATS, which acquired Scuderia Serenissima, one of Ferrari's best racing customers.
While Ferrari experienced ups and downs throughout its history, one thing was certain: the company was always competing with other sports car manufacturers. Enzo Ferrari’s competitive spirit was embraced by the company as it met each and every challenge with innovation. It quickly became the driving force behind the company's innovative activities.
In the early 1960s, Ferrari had an internal management crisis, which the founder ended by force, firing all the managers involved - experts who had played their part in the company's success. Eventually, they were replaced by a younger generation of managers, but this move further consolidated the founder's power.
Fabbrica Italiana Automobili Torino (Italian Automobile Factory of Turin) was a holding company originally and mainly active in the automotive industry and a precursor of today's Fiat Chrysler Automobiles NV (FCA). Founded in 1899, the Italian company acquired several car brands, including Maserati, Lancia, Alfa Romeo, and Chrysler Group, until it eventually merged with the holding company that owned the Citroen and Peugeot brands to form Stellantis.
Fiat S.p.A. acquired a 50% stake in Ferrari in 1969. This led to an immediate increase in investment funds, and work began immediately on expanding Fiat's Turin plant to include the Ferrari-powered Fiat Dino. Similarly, investment in future Ferrari models was also boosted.
The Ferrari plant in Maranello had a less positive impact on labor relations. A journalist who visited the plant reported that Fiat workers ran out of the workshop in June in response to a whistle. This was part of a work stoppage in Turin that contrasted with the relatively smooth flow of production at nearby competitor plants.
Although Fiat quickly began to exert influence on the development, production, and marketing of road cars, the racing department was not initially affected.
A 90-year-old Enzo Ferrari passed away in 1988. A specialist F40 was the last model he commissioned. Following the purchase of the founder's shares, Fiat increased its stake in Ferrari to 90%.
A Mediobanca-led consortium of banks purchased 34% of Ferrari from Fiat for €775.2 million in June 2002. Among the consortium members were Mediobanca (21.5%), Commerzbank (10%), Banca Popolare dell'Emilia Romagna (1,5%), and Compagnie Monégasque de Banque (1%). A 100% owned investment group by the government of Abu Dhabi, Mubadala Development Company, acquired 5% of Ferrari in July 2005. The five percent stake was purchased by Mubadala for €114 million. With a price of €892 million, Fiat repurchased the 29% stake still held by the banks.
Fiat purchased the last 5% stake owned by Mubadala Development for €122 million in November 2010. With this acquisition, Fiat has regained 90% of the luxury Italian automaker. In October 2014, Fiat Chrysler Automobiles announced its intention to separate Ferrari from FCA; at the time of the announcement, FCA owned 90% of Ferrari.
The separation began in October 2015 with a restructuring that established Ferrari NV as a Ferrari holding company, followed by a sale by FCA of just over 10% of its shares in an initial public offering on the New York Stock Exchange and a simultaneous listing on NASDAQ. Ferrari's FCA shares were distributed to FCA shareholders during the separation process, and Piero Ferrari retained a 10% stake.
Ferrari NV and Fiat Chrysler Automobiles NV announced on January 3, 2016, that the Ferrari business was separated from the FCA Group. This is a big change not only for Fiat Chrysler because Ferrari has been run independently since 1969, even though Fiat bought it in 1969.
The Fiat Group's intention to sell Ferrari has not surprised financial analysts, but they are only speculating about the real reasons for the breakup. Most likely, Ferrari, although it has always performed well as a jewel of the Group, proved with its completely independent operation that it did not quite fit into the concept. Sometimes these difficult decisions have to be made, to divest certain products or services to devote the necessary professional and financial resources to others.
Ferrari is a company where winning is the dominant element of the culture. There is reportedly no compromise because people want to win. Employees at Ferrari are not looking at competition, as they are creating trends and pioneering innovations. The feeling of shaping the industry is not arrogance, it is sheer determination. Naturally, the company does regularly do competitor research, but competitors’ activities are not the driving force of strategy or innovation at the company.
Ferrari is proud to be uncompromised: materials, communication, design, performance - all point towards offering the best experience possible.
One of Ferrari's greatest assets is its talented employees. In order to achieve the extraordinary, they must collaborate as a team. In cultivating integrity, excellence, and generosity, the company allows every employee to express their full potential and become a part of something greater.
Traditions are always born out of innovation. The Ferrari legend is driven by the pursuit of lasting firsts. A combination of groundbreaking technological solutions and exceptional artisanal craftsmanship provides them with the ability to create icons that remain timeless in an ever-changing world.
Racing spirit living on in Ferrari's emotions transcends track and road - ultimately becoming an authentic way of living life. To be able to set ambitious goals and exceed expectations, to push every boundary, is what excites them most. This is how the beauty of achievement comes from the power of passion.
Ferrari's Prancing Horse logo stands for quality, performance, exclusivity, design, and uncompromised craftsmanship. But is there more to the logo than it seems at first?
The story of the galloping horse dates back to 1692 when a similar emblem appeared on the flag of the army of King Victor Amadeus II of Sardinia and Piedmont. According to legend, Enzo Ferrari was visiting the parents of the famous World War I pilot Francesco Baracca when the Baroness' mother suggested that he put the same horse on the Ferrari racing car that had been used on the side of her son's fighter plane during the war. The horse on the original emblem was black, as it is today, but the canary yellow background was an idea from Enzo Ferrari, the color of Modena.
According to another version of the story, the galloping horse on the side of Baracca's fighter was not a symbol of luck, but a symbol of murder. Francesco Baracca had killed a Stuttgart pilot during the war, and the rearing horse is also found on the German city's coat of arms - interestingly, also on a bright yellow background. AN alternative image of the same horse can be found in the coat of arms of the Porsche company, which happens to be based in Stuttgart.
The first car to bear the famous prancing horse was an Alfa Romeo. Scuderia Ferrari was not a car manufacturer at the time, but an Alfa racing team. The Ferrari emblem was first seen on the Scuderia Ferrari Alfa Romeo 8C Monza in 1932.
It was only after World War II that Ferrari started producing road models, as Enzo Ferrari was not particularly interested in selling them, but needed something to finance his real passion, racing. The first road car to bear the Ferrari logo was the Ferrari 125 S of 1947, powered by a 1.5-liter V12 engine.
After the emblem with the prancing horse against a yellow background and the Italian tricolor above it became established, many different versions appeared over the decades, but the basic elements remained the same. The main differences were in the design of the horse's shape, especially in the thickness of the lines and the extension of the horse's gait. Compared to the original logo, the horse is spindlier, stronger, and has a higher front leg.
For many Ferrari enthusiasts, their first encounter with the prancing horse is on the big screen.
Along with movies, video games, books, comics, and understandably, music videos, Ferrari cars are a common sight. Famous artists like Jamiroquai, Calvin Harris, and Jay-Z have all had their videos enhanced with the red wonders.
There are three main exhibitions held in the Maranello-based Ferrari Museum:
According to reports, Ferrari and Aldar Properties signed an agreement to develop the first Ferrari theme park in the Middle East, located in Abu Dhabi, toward the end of 2005. As per the original plans to open the Ferrari theme park on October 28, 2008, it was eventually opened on November 4, 2010, due to unavoidable delays and circumstances.
Ferrari World is a Ferrari theme park located at Yas Island in Abu Dhabi. The park is located under a 200,000 square meter roof and is the largest indoor theme park in the world. Another record is the fastest roller coaster in the world, Formula Rossa. One of the park's most exciting rides is a 62-meter tower that offers the acceleration effect of a Formula 1 car.
Besides Italy, the park houses the largest collection of current and past Ferrari models, as well as a replica of the Ferrari Formula 1 depot with the equipment used there. Visitors to the park can also get their hands on the F1 tools and practice changing wheels on the race cars.
Ferrari is one of those special companies that sell significantly less of its core products than of its complementary merchandising products and services.
This is possible because the cars represent a lifestyle that millions of people around the world aspire to, but which is out of reach for the average consumer due to its high price range. Merchandising products, on the other hand, represent these values perfectly and are much more affordable, so the masses buy key chains, mugs, and t-shirts.
Branding is an art that aims to have your brand represent a well-defined value. When your company has become synonymous with the solution, you have got a winner.
Formula 1 is the most prestigious racing series administered by the International Automobile Federation (FIA). The Formula One World Championship is contested with open-wheel, single-seat race cars. The series consists of a series of Grand Prix races held on closed circuits or hard-surfaced street circuits designed for the purpose. Two world champions are crowned each year, one in the individual classification and one in the constructors' classification (World Team Championship). The races are watched on television by hundreds of millions of viewers in more than 200 countries around the world.
Ferrari made its Formula One debut in 1950 in the second race of the season, the Monaco Grand Prix with Alberto Ascari and Luigi Villoresi. The first two years of Formula One were dominated by Alfa Romeo, with Juan Manuel Fangio and Nino Farina. In Ferrari's second year, 1951, José Froilán González took the Italian team's first victory at British Grand Prix.
In the 2000s, Michael Schumacher and Ferrari won five years in a row (2000-2004). During this period, several new records were set by the team and its German driver. Schumacher was on the podium in every race in 2002 and won 91 Grand Prix in his career. During this period, the FIA made several rule changes, including a ban on team ordering after an incident at the 2002 Austrian Grand Prix. Schumacher's winning streak ended on September 25, 2005, when Renault's Fernando Alonso became the youngest Formula One world champion.
Throughout the decades, Ferrari has won 15 Formula One drivers' and 16 constructors' world titles since 1950, making the racing team one of the most successful teams in Formula One.
The 24 Hours of Le Mans is one of the oldest motor races in the world, held since 1923 at the Sarthe circuit near Le Mans, France. Originally a test of the reliability and economy of production cars, the race is still held today. The race is held every year in early June, the middle of the European summer. The field starts in the early afternoon and finishes in the early afternoon the next day. Over 24 hours, the riders cover nearly 5,000 kilometers.
In February 2021, Ferrari announced that it will compete in the Hypercar category (LMH, formerly LMP1) of the endurance championship, but the names of the car and drivers have not yet been disclosed.
Ferrari has won nine overall victories at Le Mans, most recently in 1965. The Italian marque has not competed in the top class since 1973 but has remained part of the field through its GT program, to the extent that in 2019 it won its category for the 27th time in the GTE 488 driven by the trio Alessandro Pier Guidi, James Calado, and Daniel Serra.
The decision comes against the backdrop of the need to maximize the budgets of Formula 1 teams, with Ferrari looking to join other racing series to redeploy the freed-up parts of its workforce - which is how some of its employees, including renowned professionals such as chief designer Simone Resta, ended up with client team Haas.
Because of its narrow customer base, Ferrari has a completely different marketing strategy than other lower-end automakers. Ferrari's sports cars are not mass-produced, so there is no need for television commercials, continuous advertising, or car shows in every major city.
Instead, Ferrari uses racing as its primary branding tool. The team may not have had its most successful decade, but since its debut in 1950, it has rallied a fan base of millions - most of them car enthusiasts who are the key potential buyers of the company.
As a result, almost the entire 'marketing' budget is spent on Formula 1 participation, which in turn puts a lot of pressure on the underperforming team.
It is very easy to get lost in the extreme possibilities of advertising and marketing in today’s world. Ferrari found the channel that became the basis for its branding and advertising efforts back in the 1950s. Formula 1 is a channel through which Ferrari's potential target audience can be reached directly - and any other channel would be far less targeted.
“Despite the difficulties caused by COVID-19, which included a seven-week production suspension, the Group still delivered 9,119 cars in 2020, in line with our second-semester production plans, recorded revenues of 3.46 billion euro and delivered an EBITDA of 1.143 billion euro,” stated John Elkann, Chairman of Ferrari in the 2020 Annual Report of the company.
This is one of the most important strategic changes Ferrari has made in the last decade. Since the 1990s, in the Montezumolo era, management considered the critical mass of about 7,000 annual production runs to maintain the rarity of the cars.
This policy was heavily criticized and was no longer sustainable, especially after the IPO. The current management decided to further increase the number of cars produced, which contributed significantly to increasing revenues and the stock price. At the same time, the question of the extent to which the number of vehicles sold can be increased to maintain the high price level is the subject of ongoing internal analysis.
Select luxury and lifestyle manufacturers and retailers are licensed to use the Ferrari brand. Ferrari also designs, sources, and sells Ferrari-branded products online and through its network of 18 company-owned and 18 franchised stores.
Given Ferrari's reputation as one of the world's most recognized premium luxury brands, the company believes it is well-positioned to expand the brand's presence globally through sportswear, watches, accessories, consumer electronics, and theme parks, which will enhance the brand experience for loyal customers.
1962 Ferrari 250 GTO: In 2014, this 53-year-old Ferrari sold at Pebble Beach for $34.65 million, breaking all records. Until an even more expensive Ferrari car was sold at auction, it was the most expensive car ever sold. In 1962, Jo Schlesser drove one of the 36 Ferrari 250 GTOs made and finished second in the Tour de France.
2005 Ferrari Enzo: A 2005 Ferrari Enzo known as the "Pope's Ferrari" was one of the last of 400 models built by the company’s founder and given to Pope John Paul II. Unlike other Ferrari types, the pope never used this car. Ferrari sold the car on the pope's behalf and donated the proceeds to the tsunami victims in Asia in 2005. An auction in August brought $6.05 million for the vehicle.
Ferrari 308 GTS: Ferrari built and sold 3,219 308 GTS cars between 1974 and 1986, one of which appeared in the movie "National Lampoon's Vacation". During its initial run, the iconic vehicle sold for around $50,000 at retail and was driven in the film by supermodel Christie Brinkley. The Ferrari 308 GTS could sell for up to $110,000 today. This is true, however, only if the vehicle is in excellent condition.
Ferrari F40: The F40, developed to celebrate Ferrari's 40th anniversary, was not originally intended as a road car. The company wanted to turn the 288 GTO into a race car to compete with the Porsche 959, the space technology of the day. The result was an extremely simply designed but impressively fast and enjoyable to drive sports car, its speed was due not to its cutting-edge technology but to its extremely good power-to-weight ratio and aerodynamics.
Ferrari F355: A mid-engine sports car with the familiar silhouette of the F355 was the last model to use it. Ferrari's F355 sports car has been designed by Pininfarina, which is the most popular design firm within Ferrari. With a 3.5-liter displacement and five valves per cylinder, the F355 engine was an evolution of the 348's V8. The car owned by Shaquille O'Neal was custom built for him.
While Ferrari produces a relatively small number of vehicles, its manufacturing process requires input from a large number of suppliers, and therefore a complex supply chain management system to ensure production continuity. Stocks are located in Ubersetto, close to Maranello, and their handling is contracted out to an external logistics company.
In Maranello, Ferrari produces engine parts, machining parts, painting parts, vehicle assembly, dyno testing, and casting aluminum alloys. The aluminum bodies are manufactured in the second plant in Modena. Ferrari sources all parts, components, and body panels not produced by the company itself.
A distinctive feature of Ferrari is that every car ever built has been assembled in Maranello. Over the years, of course, the process has changed considerably: While in the beginning all the work was done by hand, today robots and automated processes are used for painting, assembling, and testing the finished components.
Decades ago, the Maranello plant was already capable of producing 10 to 12 Ferraris a day; today, it produces nearly 30, and while that number could be increased further, the company has no plans to increase production significantly. The production strategy is to increase production only in line with growth in sales revenue.
Ferrari's V8 engines, which are hand-built on-site, pass through 32 stations during the manufacturing process, from initial bolts to testing. The V12 engines are assembled completely independently on a separate production line, as the two technologies are very different. And thanks to a strict production protocol and limited quantities, every Ferrari produced is tested on a track near the factory.
Cars are sold by Ferrari exclusively through their network of authorized dealers (aside from one-offs and racing cars, which are sold directly to consumers). Through its subsidiaries or partly-owned subsidiaries, Ferrari imports cars in the large markets and sells them to dealers for resale.
Most Ferrari vehicles are sold to one importer/dealer in smaller markets. A review of the quality of its dealer network is conducted regularly by the company. By December 31, 2020, the Ferrari dealer network consisted of 168 outlets with 188 sales locations.
Approximately 500 trademarks (word or figurative) have been registered by Ferrari in several countries and for numerous classes. In most of the major classes of goods and services, the company owns more than 4,000 trademark applications as well as registrations in about 140 countries.
Formula 1 World Championship participation with Scuderia Ferrari provides innovative knowledge that is then transferred to the road cars, for which the most recent example is the SF90 Stradale's hybrid drive unit.
As of September 2018, Ferrari opened its first facility dedicated exclusively to design, the Ferrari Design Center. There are two studios and a Tailor-Made department in the new building, so customers can get acquainted with Ferrari's individualized services. As part of Ferrari's design process, the Ferrari Design Center has designed their latest cars, including the F8 Tributo and SF90 Spider.
Although Ferrari's corporate culture is almost exclusively about winning, its strategy is based not only on a healthy competitive spirit but also on a variety of other factors. Environmental awareness, equality, and social responsibility are elements we never thought Ferrari would embrace.
Ferrari demonstrated a precise and consistent product strategy that, combined with the company's manufacturing capabilities, defined the brand for car enthusiasts. The team kept almost all production in-house, bringing in suppliers only for elements it could not produce in one of the two factories.
In addition to the brand, Ferrari's dealer network is also a major contributor to the company's success. Instead of building its own network of dealerships, Ferrari has a competing dealer network that is regularly reviewed to ensure it always offers the best quality.
Stock price (on 1st July)
Still under Fiat Chrysler Holding NV, which was priced at $14.63.
3.460 billion EUR
2.854 billion EUR
Number of employees
Number of cars delivered
Key takeaways from Ferrari’s story:
Ferrari, which is more than 90 years old, has come a long way from a quasi-one-man racing team to a publicly traded company valued at $30 billion. Throughout its history, the competitive spirit of Enzo Ferrari has been ever-present, and the team has sought to harness it in as many areas of its business processes as possible.