Why Ferrari's Imminent Public Offering Is a Brilliant Idea

You can forget everything else going on in the auto industry this year - 2015 will most likely go down in history as the Year When Ferrari Went Public. The Prancing Horse's Initial Public Offering (IPO) will likely arrive by fall and it's a brilliant idea.
It's only natural to fear such a move at first. Especially after the decision was rumored to have had quite some importance in Luca di Montezemolo's decision to push the "Eject" button last year.

To lose a man who carried a strong connection to Enzo Ferrari and who had served the brand for 23 years might seem like a risky move. Then again, wasn't it risky for Enzo to leave Alfa Romeo in the early 30s and found Scuderria Ferrari?

Such bold moves shake things up like earthquakes, which means they also put people out of their comfort zone. And this is the key to success.

Over the years, some of the best cars I've driven ended up being so sweet simply because they had been built under more pressure than normal. Perhaps a convertible that wanted to show everybody it can be just as good as a coupe, or maybe an SUV that aimed to prove it can rewrite the rules of the segment.

With FCA CEO Sergio Marchionne taking over Ferrari himself and the stock exchange debut just around the corner, I'm pretty sure nobody is resting on their laurels in Maranello these days.

Figures have been dancing in the rumors for years now, but it looks like FCA won't sell more than ten percent of the Ferrari stake. An extra 10 percent is expected to land in the hands of Pierro Ferrari, Enzo's son and company vice chairman. As for the remaining 80 percent, this will go to the Agnetti family, as well as to the rest of the current stakeholders.

Ten percent going public might not seem like much, but the general context of the new card shuffling means Ferrari will step a bit closer to the business model used by young companies. Over the last couple of years, I've watched this exact type of business strategy pushing McLaren to serious heights.

Since the Brits were basically new on the market, they strived to make up for this by listening to the customer. On the other hand, Ferrari has always played the role of the aristocratic company who forced everybody to play by its rules.

Sure, Ferrari's attitude, which was obviously honed by Enzo himself, is part of its aura, but a small dose of paying attention to feedback will only make future Fezzas better.

I was never a big fan of Marchionne and I know precisely why - the man is not there to cultivate a personal brand. That was Di Montezemolo's part, with the former chairman even fancying going into politics.

Of course, Marchione's unemotional approach has the potential to dilute the Prancing Horse's character. But I'm pretty sure that will not be the case.

For one thing, the man has been paying too much attention to the market not to notice both mistakes and smart moves made by rivals. Perhaps Lamborghini's toned-down, understeering Huracan is the best example here. With Aventador-rivaling performance, the Huracan is undoubtedly a commercial hit, but I'm afraid to consider the long-term consequences of the trend it is indicating for the company.

On the other hand, just like McLaren recently admitted they can't allow themselves to confuse their customers by building an SUV, as other supercar and GT brands are doing, I don't expect the Prancing Horse to take the gamble too far.

Instead, I see a Ferrari that has plenty of chances to become ultimately mature. To make the most of the brand ego by opening up to the world, if only just for a few blinks per fiscal quarter.

As for how exactly Ferrari is planning its IPO, some may expect the Italians to play the Chinese new money lottery and hit the Hong Kong stock exchange. I wouldn't bet on it.

China may now be the world's greatest automotive market, but its politics are not exactly what you can call predictable. You need to look no further than Prada's 2014 fiscal year demise to find proof for that.

The Italian fashion group may have won from being listed on the Hong Kong stock exchange back in 2011, a time when the first Ferrari IPO rumors surfaced, but last year sales in the area dropped significantly. And you can't play with stock without a solid operational base. One of the reasons for this was that China enforced a campaign against financial exuberance.

So Ferrari will probably stick to the US open market, even though a European listing isn't impossible. In fact, Montezemolo himself accused Ferrari of becoming too American. While that is another story for another time, it's also an argument for the US listing.

It's easy to judge people by their success and I admit I've made that mistake with Di Montezemolo. I've now come to the conclusion that, just like in the case of some precious stones, sometimes it's a good idea to assess people by their failures.

I'm thinking Ferrari in F1 here. Over the years, Schumacher, Jean Todt, who now remains FIA president, engine crafter Rory Byrne and strategist Ross Brawn helped Di Montezemolo maintain Scuderria Ferrari dominance.

Alas, their success crushed under its own weight. While Di Montezemolo never hesitated to blame other people for Ferrari's more recent F1 fall, he also never took any blame upon himself.

With this fresh wind blowing all over Maranello, I'm expecting things to change on the track too. In fact, the motorsport vs. road cars relationship relies on the same no-comfort-zone principle I mentioned above.

Ferrari, as well as any other performance car makers, could very well design superb go-fast machines without the help of motorsport. But that would mean there would be no competition to stimulate them. It's much easier to allow the fire lit up by the battle on the track to motivate you than to make memorable road cars simply because you know you have to.

These Italians have always known how to capitalize on the people's fascination for the brand. And what they did in the distant past serves them well today - the fact that last year nine out of ten most valuable classics sold at auctions were Ferraris is an example as good as any.

But the company needs to evolve and I'm referring to something more profound than the otherwise brilliant turbo road car engines they are now building.

Ferrari was ranked as the world's most popular brand for two years in a row, for 2012 and 2013. Maranello lost that title in 2014. Curious about who stole the victory? LEGO did. And while I don't give a damn about their movie, which apparently brought an important contribution to their success, I know I'll always enjoy playing with the bricks. Simply because it reminds me I need to keep reinventing stuff.
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About the author: Andrei Tutu
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In his quest to bring you the most impressive automotive creations, Andrei relies on learning as a superpower. There's quite a bit of room in the garage that is this aficionado's heart, so factory-condition classics and widebody contraptions with turbos poking through the hood can peacefully coexist.
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