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Originally posted by see_fu
well ferrari is definitely putting out quality not quantity

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Fiat SpA announced Wednesday it's buying the Maserati sports car brand and business from Ferrari, a company in which Fiat already owns a majority stake. The deal is being done to meld Maserati and Fiat's underperforming Alfa Romeo unit, and also probably to liberate Maserati from Ferrari in advance of a stock listing of the Italian performance car company.

Terms of the deal have not yet been disclosed. Fiat just agreed to take $2 billion from General Motors in exchange for not exercising a put option that would have required GM to buy the 90 percent of Fiat Auto it didn't already own. This deal could not have been done before the deal with GM.

Fiat's struggling carmaking unit owns the Fiat, Alfa Romeo and Lancia brands. The Fiat group also owns a 56 percent stake in Ferrari.

"This operation is essential for the future development of Alfa Romeo," said Fiat Chief Executive Sergio Marchionne.

Fiat is interested in expanding both the Alfa Romeo and Maserati businesses globally. Last year, Fiat hired former BMW marketing executive and Rolls Royce CEO Karl-Heinz Kalbfell to run Alfa and put together a new business plan for the division. Alfa last year sold 180,000 cars, but it hasn't marketed in theU.S. since 1991. Maserati sold 4600 cars last year, but has targeted 10,000 a year with about a third of that designated for North America where it has restarted distribution.

It is likely that little cash is changing hands in the deal as the combination benefits both Ferrari and Fiat. Fiat posted an operating loss of $1.3 billion in 2003, and is expected to post a $1 billion-plus loss for 2004. Since 2000, Fiat has posted net losses in excess of $14 billion. In 1990, Fiat ranked second to Volkswagen in Europe, with sales of 1.9 million cars and a 13.8-percent share. But the $27 billion company is now Europe's weakest automaker, with sales in 2004 falling to 1 million-nearly half the level of 15 years ago-and European market share of about 7.6 percent. Quality problems and a loss of its protected home market where Japanese and Korean brands have been winning over customers have generated the problems.

The Ferrari brand is viewed as very valuable, and Fiat stands to make out financially if the company sells shares to the public. The company is set to introduce the F430 Spider next month in Geneva. That car features a new 4.3-liter V-8 that produces 483 horsepower and 343 pound-feet of torque-88 more horsepower and 68 additional pound-feet than the 3.6-liter engine found in its predecessor, the 360 Spider. Paired with a Formula 1-derived gearbox that Ferrari says shifts gears in 150 milliseconds, the compact V-8 propels the F430 Spider from 0 to 62 mph in roughly 4.1 seconds and to a top speed in excess of 193 mph, according to Ferrari.

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Though they may now share one boss, don't expect Alfa Romeo and Maserati to lose their individual brand identities, asserted CEO Karl-Heinz Kalbfell in an interview with TheCarConnection.com. Last month's decision to strip Maserati away from Ferrari and merge it in with Fiat's Alfa arm came as one of a series of surprises following Fiat's $2 billion settlement with General Motors. Originally intended to help Ferrari grow revenues without diluting its own brand, Maserati will now help in the hoped-for revival of long-struggling Alfa, said Kalbfell.

Maserati, he noted, will retain a reasonably degree of autonomy. It will remain based in its ancestral home of Modena, Italy, and will continue to work with Ferrari's designers and engineers. But Maserati, Kalbfell added, "may enter new product categories and so it would need additional resources." There will almost certainly be ways for Alfa and Maserati to share, the CEO said, but he intends to ensure that this doesn't result in so-called "badge-engineered" products that are little more than clones with different sheetmetal skins. The challenge is to maintain a balance between cost and brand DNA, said the former Volkswagen senior executive, noting that VW is an example of how sharing platforms can work - or cause problems.

Kalbfell suggested there are a wide variety of new market segments Maserati could consider. One possibility was shown by the Italian design house, Bertone, which brought a show car modeled after the legendary Maserati Birdcage to this year's Geneva Motor Show. More likely would be something in the crossover/SUV category, along the lines of the Kubang concept vehicle Maserati rolled out several years ago. "We have some projects already in the pipeline," Kalbfell hinted.

Before the recent realignment, the goal was to steadily build Maserati into a sort of hybrid brand, not quite mass market, not quite as exclusive as Ferrari. Though sales weren't growing as quickly as hoped for, the target was 10,000 Maseratis annually. "The potential is there to grow much beyond 10,000," Kalbfell told TCC, quickly adding that the active word was, "potential." What he has in mind, he described as "the snowball effect. It is hard work in the beginning. I have to roll it and roll it, and then it rapidly grows bigger."

Maserati returned to the U.S. market several years ago, after more than a decade's absence. Kalbfell makes no secret of his desire to bring back Alfa, as well. That was one of the original but unachieved goals behind the brief tie-up between Fiat and GM. It is still possible, Kalbfell insisted, but it won't be easy. "I can make you a business plan for America in two hours," he said, "but people who know the American market know it won't work. The American market is unforgiving." It will take plenty of "homework" before Alfa is ready to lay out a plan, though Kalbfell has said, in recent weeks, he could imagine a U.S. launch anytime before at least 2007.

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Fiat, which currently hold a 56 percent controlling share of Ferrari, plans to buy back an additional 29 to 34 percent of the company, AFX News today reported. Fiat sold 34 percent of Ferrari in 2002 to various investors, including Mediobanca. The organization then sold 5 percent of the company to an Abu Dhabi investor. As a part of an agreement signed when it sold the 34 percent stake, Fiat has the right to re-aquire the shares at any time. Moreover, Mediobanca no longer wishes to be involved with the automaker. Fiat plans to re-aquire the 29 percent of the company that Mediobanca still holds, company officials said, and will probably allow the Abu Dhabi company to retain its stake.

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The standard wait time for a new Ferrari has crept past the two year mark, according to a new report in the Wall Street Journal. In some cases, that figure is as high as three years.

Even with output at an all-time-high of 5,700 cars in 2006, supply can't match demand. A few years ago, chairman Luca Cordero di Montezemolo famously said Ferrari would never sell more than 5,000 cars a year. The company has since passed that milestone, but it has done nothing to meet the increase in demand from the Middle East and Asia.

As Ferrari dealer Michael Mastrangelo explained to the Journal, by the time a customer receives his or her car, a new or updated model has already been introduced — a frustrating scenario to say the least. Mastrangelo said his customers wait an average of three years. And when those cars do arrive, a price above MSRP is a safe bet.

“It’s very hard to come into a dealership right now and put in a new order if you are not already a customer,” Mastrangelo said. “When I get a young person, what I say is, let’s start with a used car.”

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But at the end of the day, if I got to pick between a new rear-engined Porsche and a used mid-engined Ferrari, the Ferrari wins every time.

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Ferrari today concluded its assembly of shareholders at which Jean Todt stepped down as chief executive officer. Todt was originally hired to head the F1 racing team in 1993, was promoted to general manager of the company in 2003 and CEO in 2006. After relinquishing the role of general manager to Amedeo Felisa in 2006, Todt handed over control of the Scuderia to Stefano Domenicali at the start of this year.

Felisa will now also succeed Todt as CEO. Meanwhile Todt will stay on in certain limited capacities for Ferrari, including a seat on the board, the presidency of both Ferrari Asia Pacific and Ferrari West Europe as well as representation of the Scuderia on the FIA World Council. Todt announced that he had stayed on as chief executive only until company president Luca di Montezemolo completed his term as head of industrial group Confindustria, and that he was now moving on to dedicate more time to himself and his other interests. The shareholders also re-elected Montzemolo as president and Piero Ferrari as vice-president, while renewing the terms of all 13 directors, including Montzemolo, Ferrari, Todt and Felisa as well as Fiat chief Sergio Marchionne, Sergio Pininfarina and seven other board members. For more information, see the press release after the jump.

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