Since electric cars joined the consumer car market, the global automotive industry has changed dramatically. As electric cars cost billions of dollars to research and develop, older automakers have been forced to rethink their product strategies. Nowhere is this more evident than in the luxury car segment. While many luxury automakers struggle with declining demand and profit margins, one automaker continues to outperform the rest: Ferrari.
According to Ferrari, 2024 was a record year for the brand. With a margin of 28.3%, the company made an average profit of $136,671 per car. For example, in 2024 Porsche’s profit margin fell to 14.1% from 18.0% in 2023, with an average profit of about $20,000 per vehicle. BMW 2024 operating margin fell to 6.3%, which is 37% less than last year. After selling 2.45 million cars, BMW’s average profit per car in 2024 was $7,304. This is why Ferrari stands out and how it manages to dominate the luxury car market.
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Why is Ferrari so profitable?
A row of bright red Ferraris parked side by side on a city street. – Cuorerouc/Getty Images
The first reason Ferrari is so profitable has to do with low production and high demand. Since Ferrari limits its production numbers to around 13,000-14,000 cars per year, this allows the company to sell each car at a higher price. Special customizations through Ferrari’s Tailor Made and Atelier programs allow customers to further customize their show jumping horses. These programs can often add hundreds of thousands of dollars per car.
Ferrari is also one of those brands that rarely discounts their cars because they don’t have to. According to user @very_berry99’s post on X, when asked about whether F1 drivers get discounts, Carlos Sainz, a Scuderia Ferrari F1 driver with an impressive collection of cars, said: “Actually, no, Ferrari doesn’t give discounts – not even to the drivers. The brand is known to care deeply about who buys their cars to maintain exclusivity and profitability.
With the logo itself worth more than $15 billion, Ferrari earns around 10% of its revenue from licensing, sponsorships and merchandise. Many of its supercars also depreciate less than McLarens or other rivals, giving customers reassurance that they won’t lose nearly as much money when it comes time to sell them. In some cases, with special Ferrari models, they can even make money, as there are excellent investment opportunities.
The Ferrari you need to buy to buy the Ferrari you want
The bright red Ferrari Daytona SP3 is on display at the Ferrari booth. – Martyn Lucy/Getty Images
The strength of this Italian brand is also evident in special purchase programs, where access to extremely rare editions often requires the possession of a single model. For example, in order to purchase a LaFerrari, Ferrari must be personally selected and invited to buy it. Ferrari spokesman Jason Harris told The Independent that the special Ferraris “are only offered to our most loyal and passionate customers who have a long-standing relationship with the brand”.
There have been cases where Ferrari car collectors with a collection worth over 50 million. USD, were not considered “important” enough to be invited to buy a LaFerrari. In terms of value in 2015 Ferrari LaFerrari cost 1.4 million. $ when new but used is now more than double.
One of the most interesting Ferraris of the past few years, the exceptionally rare Daytona SP3, recently sold at auction for $26 million. All of this highlights why Ferrari is so successful and why some collectors are willing to go the extra mile and buy dozens of Ferraris to stay in Ferrari’s grace.
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Read the original article on SlashGear.