Global Growth: Ferrari SpA invests $350 million in Maserati venture

BOLOGNA, ITALY – Ferrari SpA is in the final stages of completing its E391 million (US$350 million) investment in the Maserati marque, which it acquired in 1997. The company has invested E111 million ($100 million) in the past three years revamping Maserati’s production facility in Viale Ciro Menotti, Modena, Italy, and plans to invest another E280 million ($250 million) in the next four years in a new headquarters for Maserati, as well as a new machine shop and paint shop for Maserati’s assembly operations.

The investment is part of a move to reinvigorate the Maserati brand as Ferrari completes plans to expand Maserati’s reach around the globe. Maserati will make its move into the U.S. market in March when it launches its new Spyder model, which goes on sale later this month is Europe. Plans also call for Maserati to launch a Coupe model in the U.S. in May. The Spyder will be the first Maserati product sold in the U.S. since 1989, when the automaker pulled out of the U.S. market.

Maserati expects to sell upwards of 40% of Spyder and Coupe production in the U.S., with total vehicle production rising from 2,000 units in 2001 to 3,800 units in 2002 and 4,500 units by 2003.

The revamped production facility is expected to produce 18 units daily on a single shift with a second line beginning in March, when sales begin in the U.S. Each Spyder is expected to take 72 hours to assemble and to include more than 30 subassemblies provided by the more than 400 suppliers that provide parts to the entire Ferrari SpA group.

Maserati expects employment at its sole production facility to boost from 350 employees to more than 800 within the next four years. Plans also call for Maserati to launch a new 4-door model, similar in size to the Mercedes-Benz S-Class, by 2004, as well as possible performance variants of the Spyder and Coupe models thereafter.

Ferrari SpA’s leadership takes special caution at pointing out Maserati’s resurgence isn’t being played on the back of the Ferrari brand. The company is taking careful steps to give Maserati is own foundation separate from Ferrari itself. Ferrari SpA Chairman Luca Cordero di Montezemolo says Maserati should not be looked at as a low-level Ferrari.

“Ferrari and Maserati are two different companies, but the differences are very complementary,” he told reporters at a launch event for the Spyder here. “If you want an extreme car in terms of price and performance, you want a Ferrari. If you want a car you can drive everywhere … you want a Maserati.”

Mr. Cordero says Maserati will compete against the likes of BMW AG, Jaguar Cars and Porsche AG, while providing a distinct Italian flare that has been missing from many parts of the world, including the U.S.

“There is no Italian car in the segment (in the U.S.),” he says. “Buying Maserati and doing what we are doing, we are not just doing more Ferraris.”

Mr. Cordero says Maserati products will not cross paths with Ferrari and vice versa. He adds that Ferrari will not build products that go beyond a 2-door configuration, and volumes for Ferrari will not exceed the current 4,000 units annually.

“If you want to do a car that is less expensive at Ferrari, you have to do a cheap Ferrari. I don’t want to do it,” he says. “I don’t want to put the Ferrari name on a car with less content and less prestige.”

Likewise, Maserati would be prohibited from encroaching on Ferrari’s turf. That means Maserati products will adopt a more luxury appeal. That luxury appeal, however, will not sacrifice performance.

If you go too far with sport, we risk doing a second-level Ferrari. If you do too much luxury, you do not have the passion of an Italian car,” he says.

While Maserati plans to expand its product line-up beyond the Spyder to include a 4-door sedan model, don’t expect to see it follow in the footsteps of Porsche and slap its nameplate on a sport/utility vehicle. “Maserati has nothing to do with that type of product,” Mr. Cordero says.

Maserati’s push into the U.S. market couldn’t have come at a worse time, as the country and the economy continue to rebuild and regroup after the September terrorist attacks. The man leading Maserati’s push into the U.S, however, doesn’t share the common view of gloom and doom.

Stuart Robinson, president of Mas­er­ati/­Ferrari North America, says that while the U.S. market is in a “state of unrest,” the luxury car segment has remained fairly stable since the attacks. Maserati expects overall U.S. auto industry sales to decline by as much as 10% in 2002.

The luxury segment, we think, will remain stronger than the mid-section because Mr. and Mrs. Average have been squeezed,” he tells WAW. “We’re the new kids on the block with Maserati, and we believe we’re coming into the market with a very conservative slow buildup over the next five years.”

Robinson adds that Ferrari sales have not been hampered by the events of Sept. 11. He reiterates that a 4- to 5-year waiting list remains for the 360 Modena, with a 2-year waiting list for the 550 Maranello model and a six-month waiting list in place for the 456M GT/GTA. In all, only 20 cancellations were placed on the existing 4,300 Ferrari vehicle orders after the terrorist attacks.

Mr. Robinson says Ferrari sales seem to be “back on pace,” with the company taking 30 orders for Ferrari models during the week of Oct. 8, in line with normal sales pace.

We believe there is great potential in the U.S.,” Mr. Robinson says. “We have to sell in America to sell cars around the world.”