Should You Worry about Ferrari’s Flat Revenue in the Americas?


Nov. 20 2020, Updated 12:29 p.m. ET

Ferrari’s 3Q16

Previously, we looked at Ferrari’s (RACE) rising sales in the Greater China region in 3Q16. While Greater China accounted for just 9% of the company’s total shipments, it’s still strategically important for Ferrari due to China’s future growth potential.

Now, let’s move on by looking at Ferrari’s shipments and revenues in the Americas in 3Q16.

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Revenues from the Americas

In 3Q16, Ferrari’s shipments to the Americas faced stagnation, with just a 0.4% YoY (year-over-year) rise. Note that the Americas include both North and South America.

Ferrari’s revenues from the Americas fell 14.7% YoY to 200 million euros. The company cited the discontinuation of its high-priced LaFerrari hybrid car for this fall. LaFerrari is a limited edition hybrid car launched in 2013. Since then, the company has produced only 499 LaFerrari units, and their shipments completed in 2Q16. In 2Q16, Ferrari’s revenues from the Americas fell 12.7% YoY.

Ferrari’s sales figures are far behind other top automobile manufacturers (VCR) such as BMW (BAMXY), Daimler (DDAIF), Ford Motor Company (F), and Toyota Motor (TM) in North America due to its exclusivity and low-volume model. However, with its stable demand, the North American region remains one of Ferrari’s most loyal markets.

Should investors worry?

Apart from the regular product lineup, Ferrari also has also produced limited editions of its supercars since its inception. Such cars are typically launched in seven- to ten-year intervals. Ferrari’s loyal clients and other motorsports enthusiasts await these limited edition cars.

The discontinuation of the limited edition LaFerrari, part of the company’s pre-planned limited production strategy, was the primary reason for its lower revenues from the Americas in the quarter.

A consistent fall in demand from the Americas could hurt investors’ sentiments, as the United States is still the largest single market for the company.

Read the next article to learn about Ferrari’s 3Q16 performance in its other key markets.


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