Posted on 02/03/2022 4:22:13 AM PST by blam
Ferrari NV announced that soaring commodity prices would begin affecting the prices of its new supercars. The average cost for an Italian supercar, made by Ferrari, is between $200k-$400k, making it one of the most expensive production automobiles globally (besides French supercar maker Bugatti).
During a 60-minute earnings call with investors on Wednesday, Ferrari discussed better-than-expected fourth-quarter earnings as shipments jumped during the pandemic. However, the company explained that rising commodity costs would result in continued supercar inflation this year.
Susy Tibaldi, a luxury analyst at Swiss bank UBS, asked Antonio Picca Piccon, the CFO of Ferrari NV, since inflation remains persistent and 2021 was the first time the company increased prices by 2% due to inflation, “should we expect something similar in 2022?”
Piccon responded, there “is some pressure on the energy on the aluminum cost and we will apply this price increase to consider for that, but we will also leverage.”
“Other important levers when it comes to the pricing of the new model and selected. I mean a price increase of selected model and also the personalization. So this is an important factor we have factoring in Susy,” the CFO added.
Rising aluminum cost stems back to Europe’s winter of discontent as rocketing power prices across the region shuttered four aluminum smelters which curtailed about half a million tons of annual capacity. European aluminum prices have surged more than 350% since the pandemic low in early 2020 to about 450 euros per ton.
Ferrari uses a lot of aluminum, especially for its frames, engines, transmissions, body, suspension, paneling, and rims. The surge in prices will be pushed to the consumer as the company locks in about $155.5k profit on average per car this year.
Slumping Ferrari shares seems to correlate with surging aluminum prices that would crush margins and reduce the stock’s attractiveness.
While, of course this doesn’t necessarily imply causation – and we suspect the elasticity of demand for Ferrari is minimal – expectations for further increases in commodity costs (along with rising interest rates) will pressure the supercar maker’s bottom line.
The world is about to get a object lesson in applied economics from the post graduate school of hard knocks
If you can shell out 400k for a car, another 10 - 20 percent probably won’t put you in the poor house.
I guess I’ll have to put off my next Ferrari purchase for a few months. Oh, well.
What’s important is that President Biden is trying hard to fix all the world’s woes, and he’s doing a fantastic job, but won’t be finished until he puts all those unvaxed superspreaders in a quarantine camp for the rest of their lives (which hopefully won’t be very long). /s
If you have to worry about a price increase of Lambos or Ferraris, maybe a Ford dealership is where you really need to be heading to to buy a car.
I’d better go out today and buy one while I can still afford it.
Just buy one and let them share it..
Example - McDonalds has just raised the price of large fries to $4.75.
Wow! That’s crazy.
Burger King charged me an extra $1.50 for extra onions and pickles on the burger. 'Having it your way' is gonna cost you these days.
Burger King charged me an extra $1.50 for extra onions and pickles on the burger.
—
A pickle supply chain problem. Just great!
Think Dunn
They’ll probably sell out with a sizable waiting list.
get rid of the blond.... she’s not really a blond, but you should already know that...........
Good post—even well to do folks will resist purchases they can easily afford if they feel they are getting ripped off...
Even if the price rises are permanent it can sometime take many months and sometimes years before there is consumer acceptance of the “new normal”.
Stater Bros has choice rib eyes on sale @$8.99/lb.
That’s what I’m having.
There’s not more than about one ton of Al in a car.
That ton now costs about 200 euros more, for a 200k car. That’s 0.1%.
Meh.
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