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Ferrari hits big time in China, orders up 79%
May 09, 2019
Abstract : When it comes to increasing its turnover, Ferrari can count on the Chinese mainland - together with Hong Kong and Taiwan – and on the 353 billion in sales earned on its market.
MILAN, May 8 (Class Editori) – When it comes to increasing its turnover, Ferrari can count on the Chinese mainland - together with Hong Kong and Taiwan – and on the 353 billion in sales earned on its market. The company managed to register a growth up 79% during this year's first quarter alone – even against the backdrop of the Chinese car production continuously losing points.
After debuting on the market in 1992 through the delivery of a 348 TS model, in China Ferrari has become a standalone, even in the context of luxury products. Since then, the waiting list on orders has been nothing but full, and it seems like they should be able to tap into much unused potential. In particular given the low amount of super rich people and of market penetration compared against other Pacific countries, requesting 353 cars, or against the EU and the Middle East, with their 1,209 Ferrari purchased (+10%) and one third of China's population.
In 2018 Ferrari sold 685 cars in China (+7% against the year before), making it the group's third market in the world, tailing after the UK (981 cars, +10%) and Germany (803). Yet if this first quarter’s trend is to hold out, the People's Republic could be jumping at the top of the chart.
During this first quarter, Ferrari sold a total of 2,610 cars, up 22% against last year's sales, garnering a 940-million net turnover (+13.1%) and a 311-million-euro adjusted EBITDA (+14.1%). Thus its margins reached 33.1%, setting a new record, considering car producers tend to place more importance on fixed investments.
"Our waiting list on orders is quite full for the first few months of 2019," said last April Louis Carrey Camilleri, CEO of Ferrari. Yesterday, as he produced the group’s quarters accounts to the analysts, Camilleri managed to remind everyone of China’s strong game.
After all, Ferrari’s fans don’t seem to mind all the grief coming from Formula 1 – as their favorite car lost once more against Mercedes on the Shanghai track. Nor did the mishaps seem to have affected sales.
Starting this May 22nd, Ferrari China will be recalling 524 vehicles due to faulty doors and reported fire risks. According to China's State Administration for market regulation (SAIC), the interested cars include 167 imported units of GTC4Lusso and GTC4Lusso T models, produced between 13th July 2016 and 6th December 2018.
The problem with these 167 vehicles lies in their locking systems, as it sometimes stops from opening the car doors using their outside handles. As for the other 357 units, they include GTC4Lusso, GTC4Lusso T, 488 GTB, 488 Spider, 488 Pista and 812 Superfast imported models, all produced between 2nd November 2017 and 11th October 2018. These cars have been signaled for a fault in their fuel vapor separators, at risk of breaking and losing gases, thus increasing the vehicle’s chances of catching fire.
Ferrari will take action at its own expenses, replacing handles and locks on the doors and fixing the problem with the fuel vapor.
After all, the group has been organizing all kinds of initiatives since long, starting from the more spectacular ones, like shining red lights on the Oriental Pearl Tower in Shanghai – new China's monument to success – to the more practical, including driving courses for potential clients – in particular for their sons and daughters.
These courses are aimed at new drivers as well, since China's young and rich bachelors tend to get a brand-new Ferrari for their sweet eighteen. Yet, they also target over-50 businessmen, who may be wanting to celebrate their success by buying themselves a nice car, then looking for tailored courses which may be teaching them of all Ferrari's secrets.
Another feature highlighting the Chinese market, due to become the first in the world for Ferrari, is that there are no sales in the second-hand sector, as whoever buys a model becomes a collector themselves. Truly, owners in the rest of the world tend to sell out their car after three years on an average.
In order to have its brand well-known, Ferrari betted on art as well, collaborating with artist Lu Hao in the creation of a unique 599 GTB – painting its frame through a special technique, peculiar to Song dynasty's Ge Kiln porcelains. The vehicle was auctioned in Beijing, with the proceeds going into a three-year study program for young students enrolled at Tsinghua University in Shanghai.
In 2009 they also founded the Ferrari Owners Club China, which organizes events like the Ferrari Challenge – a 1,700 km mono-brand rally championship running along the old Silk Road, dedicated to Asia and to Ferrari's 70 years of activity.
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