Ferrari: racing through time

April 2024 / 5 minutes

Key points

  • Expert stewardship of Ferrari’s brand has driven its success within the luxury market
  • Key to maintaining excellence is the company’s ability to attract new collectors and navigate megatrends such as electrification
  • At Baillie Gifford we believe Ferrari can remain a luxury icon for generations to come
A red Ferarri against a vibrant orange and yellow sunset sky

© Shutterstock/Mike Mareen

As with any investment, your capital is at risk.


Ferrari is one of the best luxury brands on the planet. It is perhaps the best brand of any sort. The company is responsible for designing, engineering and producing the world's most recognisable sports cars. It is hard to overstate Ferrari's grip on the automotive imagination. As its eponymous founder, Enzo Ferrari, said, “Ask a child to draw a car, and certainly they will draw it red.” Enzo had little formal education and was not an engineer. Instead, he described himself as ‘an agitator of men’. A mercurial character, he rarely left Maranello and devoted his life to the pursuit of excellence for Ferrari. He was, undoubtedly, a genius marketer. There are several anecdotes of him making high-profile clients wait months for a car, even when there was plenty of inventory, just to maintain their allure.

The Ferrari brand owes a lot to its fabled founder, whose biographer wrote, "In Italy, there was the Pope, and then there was Enzo." He was a racer from the beginning – an Alfa Romeo driver since 1924 who formed his own team, Scuderia Ferrari, in Modena in 1929 to race Alfa Romeo cars. The first Ferrari badged road cars didn't appear until 1947 when Enzo himself was nearly 50 years old.

Fast forward to 2023, and Ferrari’s net revenue came in at just under €6bn. About 90 per cent of revenue comes from selling cars, engines, and parts, with the remainder from racing sponsorship and the lifestyle business. Ferrari’s operating margin is approaching 30 per cent, which is incredible for a car company.

Ferrari manufacturing is an artisanal process. The production line is not automated and is lit with natural light. Investment Manager Brian Lum described his experience witnessing Ferrari engineers laying out exhaust manifolds, meticulously spacing the pipes like a musical instrument to ensure that the harmonies produced by the car in motion sound correct.

At its Maranello headquarters, a department is dedicated to maintaining the archive of all Ferraris ever made. Vintage Ferraris appreciate more like artwork than automotives. In fact, of the top 30 most expensive cars ever sold in auction, Ferrari dominates the list. There is no substitute for the heritage, the glamour, and the craftmanship associated with Ferrari. These, coupled with its founder's remarkable character, are insurmountable assets to the brand.

At Baillie Gifford, we are fortunate to have been a shareholder of Ferrari since 2012, initially through our holding in the Fiat Group. The Fiat Group acquired a stake in Ferrari in 1969 and increased its stake to 90 per cent following the death of Enzo Ferrari, whose son, Piero, held the remaining 10 per cent.

In 2012, financial markets were concerned by Italy's national finances and the Eurozone crisis and largely ignored the operational improvements underway at Fiat. By contrast, we were optimistic about the management team's steps to improve Fiat's mass-market, and we regarded Ferrari as an extremely valuable and under-appreciated asset. Ferrari became an independent, publicly traded company following its separation from Fiat in January 2016.

So, how can the company continue to deliver exceptional growth when, ultimately, nobody needs a Ferrari?

Since production began in 1947, the company has produced fewer than 250,000 cars – that’s less than Porsche sells in a year. Scarcity is critical to maintaining the Ferrari brand’s value. This is something that the company is expertly managing. We estimate it could sell double the number of cars it currently produces but chooses not to.

It is limiting to think about future growth as the number of cars produced multiplied by the average price of each unit sold (albeit we expect stable increases to both over the long term). Instead, we believe Ferrari’s potential lies in its ability to leverage the lifetime value of a Ferrari ‘collector’ – the name Ferrari gives to its most loyal customers.

Two-thirds of new cars delivered in 2022 were bought by existing Ferrari clients. And more than half of those clients already owned multiple Ferraris. These extraordinary numbers illustrate the strength of the brand and the loyalty it commands.

Ferrari operates in a sub-category of luxury where the core business is sustained by ultra-high net worth individuals, not simply the affluent, with different implications for brand longevity and vulnerability to recessionary pressure. Despite recent economic uncertainty, Ferrari has continued to produce strong operational results and demonstrated no let-up in demand. Its cars are sold out until 2026. Ferrari's antifragile characteristics, which the best luxury brands share, have been reflected in its ability to continue to compound despite the economic backdrop.

Bespoke orders and personalisation play an increasingly large part in Ferrari’s business. The company has rules for saying no to unsuitable personalisation requests, enforces post-purchase guidelines, and recently banned a celebrity for violating them. Ferrari has remarkable order book visibility, but personalisation is the last aspect a buyer decides, introducing an element of potential surprise in revenue that the market may be overlooking.

Key to ongoing success will be the company’s ability to maintain its brand and legacy while adapting to new technologies and customer demands. We’ve discussed the opportunity of increasing the lifetime value of collectors, but bringing in new collectors is imperative to the long-term case.

Formula 1 is a big part of that. Ferrari remains the most successful and the only ever-present team on the F1 grid. F1 attracts a younger audience and is the only advertising the company does, so success on the track may prove important. Lewis Hamilton joining the team is an exciting development from both a competitive and brand perspective.

Ferarri team race car on a red and white painted track

© Darko Bandic/AP/Shutterstock

Beyond this, the primary marketing tool is other collectors. Ferrari’s Board, which includes executives from Apple, Chanel, and Christian Dior, sets the strategy of choosing between collectors. Who should get the new special edition car – a senior collector or a new enthusiast? Today, around 40 per cent of new Ferrari customers are under 40.

On the technology side, Ferrari has offered hybrid cars since 2013. They have four models, and hybrid deliveries surpassed traditional supercar deliveries for the first time in Q3 2023. Ferrari is on track to unveil its first electric vehicle (EV) in 2025, designed and assembled in its new ‘e-building’, which is under construction in Maranello. By 2030, the company aims to sell 40 per cent electric, 40 per cent hybrid, and 20 per cent petrol cars.

However, turning Ferraris fully electric may not make total sense from an environmental perspective. It takes more energy to make an EV than an internal combustion engine car, and only over the course of the EV’s life do you make back the energy efficiency. But the average Ferrari only gets driven around 2,000 miles a year, so an electric Ferrari may never regain the energy used to build it.

Autonomous driving is another megatrend that car companies face. Over the very long term, the basic concept of owning a car might also be disrupted. However, it is essential to remember that we don't view Ferrari as a car company, but rather as a luxury company. Having the whole car industry become more about utility might create space for ever more creative high-end products.

Consider the watch market, a centuries-old industry that has undergone multiple disruptions. It is difficult to imagine competing with a smartwatch on utility alone. Yet some of the most successful luxury brands in the world are watchmakers handcrafting intricate and unique mechanical movements. The value lies in the complexity and artistry rather than the function. This is what luxury is about, and the lens through which we view Ferrari’s future and its potential to remain a luxury icon for generations.

Risk factors

The views expressed should not be considered as advice or a recommendation to buy, sell or hold a particular investment. They reflect opinion and should not be taken as statements of fact nor should any reliance be placed on them when making investment decisions.

This communication was produced and approved in April 2024 and has not been updated subsequently. It represents views held at the time of writing and may not reflect current thinking.

Potential for profit and loss

All investment strategies have the potential for profit and loss, your or your clients’ capital may be at risk. Past performance is not a guide to future returns.

This communication contains information on investments which does not constitute independent research. Accordingly, it is not subject to the protections afforded to independent research, but is classified as advertising under Art 68 of the Financial Services Act (‘FinSA’) and Baillie Gifford and its staff may have dealt in the investments concerned.

All information is sourced from Baillie Gifford & Co and is current unless otherwise stated.

The images used in this communication are for illustrative purposes only.


Important information

Baillie Gifford & Co and Baillie Gifford & Co Limited are authorised and regulated by the Financial Conduct Authority (FCA). Baillie Gifford & Co Limited is an Authorised Corporate Director of OEICs.

Baillie Gifford Overseas Limited provides investment management and advisory services to non-UK Professional/Institutional clients only. Baillie Gifford Overseas Limited is wholly owned by Baillie Gifford & Co. Baillie Gifford & Co and Baillie Gifford Overseas Limited are authorised and regulated by the FCA in the UK.

Persons resident or domiciled outside the UK should consult with their professional advisers as to whether they require any governmental or other consents in order to enable them to invest, and with their tax advisers for advice relevant to their own particular circumstances.

Financial intermediaries

This communication is suitable for use of financial intermediaries. Financial intermediaries are solely responsible for any further distribution and Baillie Gifford takes no responsibility for the reliance on this document by any other person who did not receive this document directly from Baillie Gifford.


Baillie Gifford Investment Management (Europe) Limited provides investment management and advisory services to European (excluding UK) clients. It was incorporated in Ireland in May 2018. Baillie Gifford Investment Management (Europe) Limited is authorised by the Central Bank of Ireland as an AIFM under the AIFM Regulations and as a UCITS management company under the UCITS Regulation. Baillie Gifford Investment Management (Europe) Limited is also authorised in accordance with Regulation 7 of the AIFM Regulations, to provide management of portfolios of investments, including Individual Portfolio Management (‘IPM’) and Non-Core Services. Baillie Gifford Investment Management (Europe) Limited has been appointed as UCITS management company to the following UCITS umbrella company; Baillie Gifford Worldwide Funds plc. Through passporting it has established Baillie Gifford Investment Management (Europe) Limited (Frankfurt Branch) to market its investment management and advisory services and distribute Baillie Gifford Worldwide Funds plc in Germany. Similarly, it has established Baillie Gifford Investment Management (Europe) Limited (Amsterdam Branch) to market its investment management and advisory services and distribute Baillie Gifford Worldwide Funds plc in The Netherlands. Baillie Gifford Investment Management (Europe) Limited also has a representative office in Zurich, Switzerland pursuant to Art. 58 of the Federal Act on Financial Institutions (FinIA’). The representative office is authorised by the Swiss Financial Market Supervisory Authority (FINMA). The representative office does not constitute a branch and therefore does not have authority to commit Baillie Gifford Investment Management (Europe) Limited. Baillie Gifford Investment Management (Europe) Limited is a wholly owned subsidiary of Baillie Gifford Overseas Limited, which is wholly owned by Baillie Gifford & Co. Baillie Gifford Overseas Limited and Baillie Gifford & Co are authorised and regulated in the UK by the Financial Conduct Authority.


Baillie Gifford Investment Management (Shanghai) Limited
柏基投资管理(上海)有限公司 (‘BGIMS’) is wholly owned by Baillie Gifford Overseas Limited and may provide investment research to the Baillie Gifford Group pursuant to applicable laws. BGIMS is incorporated in Shanghai in the People’s Republic of China (‘PRC’) as a wholly foreign-owned limited liability company with a unified social credit code of 91310000MA1FL6KQ30. BGIMS is a registered Private Fund Manager with the Asset Management Association of China (‘AMAC’) and manages private security investment fund in the PRC, with a registration code of P1071226.

Baillie Gifford Overseas Investment Fund Management (Shanghai) Limited
柏基海外投资基金管理(上海)有限公司(‘BGQS’) is a wholly owned subsidiary of BGIMS incorporated in Shanghai as a limited liability company with its unified social credit code of 91310000MA1FL7JFXQ. BGQS is a registered Private Fund Manager with AMAC with a registration code of P1071708. BGQS has been approved by Shanghai Municipal Financial Regulatory Bureau for the Qualified Domestic Limited Partners (QDLP) Pilot Program, under which it may raise funds from PRC investors for making overseas investments.

Hong Kong

Baillie Gifford Asia (Hong Kong) Limited
柏基亞洲(香港)有限公司 is wholly owned by Baillie Gifford Overseas Limited and holds a Type 1 and a Type 2 license from the Securities & Futures Commission of Hong Kong to market and distribute Baillie Gifford’s range of collective investment schemes to professional investors in Hong Kong. Baillie Gifford Asia (Hong Kong) Limited
柏基亞洲(香港)有限公司 can be contacted at Suites 2713-2715, Two International Finance Centre, 8 Finance Street, Central, Hong Kong. Telephone +852 3756 5700.

South Korea

Baillie Gifford Overseas Limited is licensed with the Financial Services Commission in South Korea as a cross border Discretionary Investment Manager and Non-discretionary Investment Adviser.


Mitsubishi UFJ Baillie Gifford Asset Management Limited (‘MUBGAM’) is a joint venture company between Mitsubishi UFJ Trust & Banking Corporation and Baillie Gifford Overseas Limited. MUBGAM is authorised and regulated by the Financial Conduct Authority.


Baillie Gifford Overseas Limited (ARBN 118 567 178) is registered as a foreign company under the Corporations Act 2001 (Cth) and holds Foreign Australian Financial Services Licence No 528911. This material is provided to you on the basis that you are a ‘wholesale client’ within the meaning of section 761G of the Corporations Act 2001 (Cth) (‘Corporations Act’). Please advise Baillie Gifford Overseas Limited immediately if you are not a wholesale client. In no circumstances may this material be made available to a ‘retail client’ within the meaning of section 761G of the Corporations Act.

This material contains general information only. It does not take into account any person’s objectives, financial situation or needs.

North America

Baillie Gifford International LLC is wholly owned by Baillie Gifford Overseas Limited; it was formed in Delaware in 2005 and is registered with the SEC. It is the legal entity through which Baillie Gifford Overseas Limited provides client service and marketing functions in North America. Baillie Gifford Overseas Limited is registered with the SEC in the United States of America.

The Manager is not resident in Canada, its head office and principal place of business is in Edinburgh, Scotland. Baillie Gifford Overseas Limited is regulated in Canada as a portfolio manager and exempt market dealer with the Ontario Securities Commission (‘OSC’). Its portfolio manager licence is currently passported into Alberta, Quebec, Saskatchewan, Manitoba and Newfoundland & Labrador whereas the exempt market dealer licence is passported across all Canadian provinces and territories. Baillie Gifford International LLC is regulated by the OSC as an exempt market and its licence is passported across all Canadian provinces and territories. Baillie Gifford Investment Management (Europe) Limited (‘BGE’) relies on the International Investment Fund Manager Exemption in the provinces of Ontario and Quebec.


Baillie Gifford Overseas Limited is not licensed under Israel’s Regulation of Investment Advising, Investment Marketing and Portfolio Management Law,5755-1995 (the Advice Law) and does not carry insurance pursuant to the Advice Law. This material is only intended for those categories of Israeli residents who are qualified clients listed on the First Addendum to the Advice Law.

10045631 92938

About the author