Ferrari’s a pricey add to your portfolio

Article Excerpt

The Ferrari motor car manufacturing business was started in 1929 by Enso Ferrari with the goal to build a car that people would dream of owning, but which only a few could ever afford. Ninety years later, the vision of the company (symbol RACE on the New York exchange) still refers to “Italian excellence that makes the world dream.” While Ferrari manufactures motor cars, it is positioned as an aspirational luxury goods business. Supply of its products is limited, with current production of only 9,100 units per year. Waiting times are often 12 months or longer, and 65% of production is sold to existing Ferrari owners. No discounts are available. It does the brand no harm for buyers to know that the most expensive car ever sold was the $52 million price paid in a private sale for a 1963 Ferrari 250 GTO. The company spends a very high 17% of revenues on research and development in order to continue improving its…

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