autoevolution
 

Ferrari Shares Plummet Due to Sales Growth Slowdown

After Fiat Chrysler Automobiles announced its intention to spin off the Prancing Horse division and separate it from the parent company, the severance began in October 2015 with mixed feelings from the financial world. But little did Ferrari expect that the spin-off would cause more harm than good.
Ferrari FF 1 photo
Photo: Catalin Garmacea
Ferrari N.V., the holding company of Ferrari S.p.A., reported an alarmingly steep plunge in the fourth-quarter net profit. The holding didn’t give a clear outlook for 2016, but it did underline that there’s a difficult road ahead for the most appreciated sports car manufacturer of them all. This grim view of the 2016 calendar year comes after the Ferrari earned a net profit of €55 million (about $60 million) in the final three months of 2015, representing a mind-boggling 44 percent drop.

But the most unnerving factor to take into consideration is that deliveries in China slumped 22 percent in calendar year 2015. On the plus side, Ferrari shipments grew by approximately 6 percent.

Although not as worrying as the drop in net profit, Ferrari sales fell by 1 percent in the same timeframe. For 2016, the Prancing Horse is expecting sales to rise to 7,900 vehicles. By comparison, Ferrari sold 7,664 cars in 2015.

The automaker’s slowdown in sales growth took its toll on the stock market. On Tuesday morning, a share was worth $39.85. At 6:00 PM (EST), the share value fell to $34.98, representing the lowest level since Ferrari’s initial public offering on October 21, 2015.

Sergio Marchionne, the head honcho of the Fiat Chrysler group and Ferrari, declared that Ferrari could boost production output to 9,000 vehicles in 2019 if all goes according to plan. Thankfully for fans of the Prancing Horse, Marchionne reaffirmed that Ferrari isn’t going to sell its soul to the devil by boosting demand with an SUV.

The Maranello-based manufacturer expects to post €770 million euros (about $841.2 million) in adjusted earnings before interest and taxes in 2016. It’s a much slower increase compared to 2015 over 2014, when the Prancing Horse’s profit rose by 7.9 percent. From the sidelines, it seems like China’s love for Ferrari vehicles is the make-or-break factor for Ferrari’s future as an automaker and shareholders alike.
If you liked the article, please follow us:  Google News icon Google News Youtube Instagram X (Twitter)
About the author: Mircea Panait
Mircea Panait profile photo

After a 1:43 scale model of a Ferrari 250 GTO sparked Mircea's interest for cars when he was a kid, an early internship at Top Gear sealed his career path. He's most interested in muscle cars and American trucks, but he takes a passing interest in quirky kei cars as well.
Full profile

 

Would you like AUTOEVOLUTION to send you notifications?

You will only receive our top stories