FERRARI can’t make enough cars with its order books for 2025 now almost full. This has led to a revised profit outlook with a strong demand for cars and especially its personalised program.Neil
Reuters reports that Ferrari now expects its adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) to reach at least 2.25 billion euros ($A3.74b) this year, up from an already revised forecast of 2.19-2.22b euros ($A3.64b-$A3.69b).
In the July-September period, Ferrari’s adjusted EBITDA climbed 37 per cent to 595 million euros ($A990m), topping analyst expectations of 560 million euros ($A932m), according to a Reuters poll.
In response, Ferrari shares (listed on the New York stock exchange) moved up to $US333.50 ($A518.44), a gain of 40 per cent over 12 months. Market capitalization is now $US62.81b ($A97.64b).
Ferrari’s deliveries for the quarter included nine internal-combustion engine models (driven by the 296 and SF90) and four hybrid engine models. Hybrid deliveries reached 51 per cent of total deliveries in the quarter. It has its 812 Competizione A and Purosangue four-seater in ramp-up phase.
CEO Benedetto Vigna said: “The order book remains at highest levels reflecting strong demand across all geographies, covering the entire 2025.” and that all Ferrari models bar one were effectively sold out for the coming months.
Investors now see Ferrari moving into the next phase in its development with the opening in June 2024 of a new ‘ebuilding’ production facility in Maranello, development of a potential hypercar, and the launch of its battery-electric (BEV) model all expected to arrive within the next 24 months.
BMW joined Ferrari with a rosy outlook. BMW CEO Oliver Zipse earlier this month forecast strong fourth quarter sales and said the order book was filled into the first few months of next year.
He said BMW saw no need to discount EV prices and had “no interest in sinking prices to gain market share. That’s not our strategy.
“As you can see, we are managing to grow substantially even with very acceptable prices,” he said.
BMW has forecast an annual margin on earnings before interest and taxes (EBIT) in its cars division of 9.0-10.5 per cent. It has reported a 10.3 per cent margin so far this year, it said.
But BMW and Ferrari views were in contrast to other brands, including Mercedes-Benz and Porsche.
Reuters reported that Mercedes-Benz said a “brutal” electric vehicle market of heavy price cuts and supply chain issues meant it would likely hit the lower end of its 12-14 per cent adjusted return on sales forecast for the cars division, as third-quarter earnings fell.
It said it remained committed to its EV targets, but could improve earnings with better returns from its ICE portfolio if margins on EVs remained lower than previously assumed.
Mercedes’ chief financial officer Harald Wilhelm told Reuters that some car-makers were selling their EV models at below the level of ICE cars despite the higher EV production costs.
“This is a pretty brutal space,” Mr Wilhelm said.
“I can hardly imagine the current status quo is fully sustainable for everybody.”
But he said it was not in Mercedes-Benz’s strategy to offer discounts on its EV models.
Mercedes-Benz earlier this month reported a 4 per cent drop in overall third-quarter sales, with top-end sales down 11 per cent blamed on model changeovers and a shortage in 48-volt systems supplied by Bosch.
Mercedes shares are at 57.53 euro ($A95.75), their lowest in 12 months. Market capitalisation is 85.3 million euro ($A142m).
Porsche is also cautious about the future. Its shares are now at 44.71 euros ($A74.41), the lowest level since it listed in September 2022.
It blamed rising interest rates for dampening consumer enthusiasm about luxury goods and said it also affected other industries, including fashion.
Porsche chief financial officer Lutz Meschke told Reuters that as governments increase interest rates, “customers are quite reluctant (to invest in) a new product.”
“We are suffering in the entire economy,” he said.
“It is also hitting the luxury industry – you can follow it when it comes to share price development of all luxury retailers worldwide.”
Porsche, which will launch new Panamera, Taycan and e-Macan models and a new sports car generation in the coming year, has spent 2 billion euros ($A3.33b) so far in 2023 on research and development, the highest in a nine-month period in the company’s history.