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Ferrari has upgraded its profit forecast after a “stunning” increase in buyers adding expensive features to their supercars boosted quarterly earnings by a third.
Even though car sales fell 2 per cent to 3,392 between April and June compared with a year earlier, revenues rose 14 per cent to €1.5bn and pre-tax profit climbed a third to €334mn.
The Italian group now expects to make €1.51bn to €1.54bn of adjusted profit this year, up from earlier guidance of €1.45bn to €1.5bn, with its revenues forecast also raised from €5.7bn to €5.8bn.
At the heart of the upgrade is the rising trend for supercar buyers to spend large sums, often tens of thousands of pounds, on personalising their new models, above and beyond the lofty advertised price.
Custom paint jobs, highly coloured brake callipers, which guide the brake pads and are visible inside the wheel, and even paying for Ferrari’s crest to be emblazoned on the side of their car, are traditionally among the most popular features for the car brand, all of which carry high margins for the company.
One growing trend is for buyers to replace normal parts of the car, such as body panels, with carbon fibre. This is much more expensive, but looks strikingly different to ordinary painted aluminium body panels, allowing owners’ cars to stand out even when compared to other Ferraris.
“The decision to revise the guidance upwards was supported in particular by stunning results in personalisations,” said chief executive Benedetto Vigna. The personalisation income was “higher than initially expected” and was “across all models, all the cars . . . and across all geographies”, he added.
As Ferrari holds back sales to increase the scarcity of its vehicles, customers “are more tailoring the cars like their personal dress”, Vigna said.
Ferrari typically allows buyers to add specifications to their vehicles around three or four months before delivery, meaning it has good visibility that the amount of personalisation will remain consistent for the rest of the year.
Rising demand for high-margin bespoke features has been behind increasing profits across the luxury car segment, with both Aston Martin and Bentley flagging them as contributors this year.
The amount being spent on options by Ferrari buyers is also likely to rise, said Bernstein analyst Daniel Roeska, as sales increase for Ferrari’s four-door Purosangue model and super-luxury Daytona SP3.
That the company beat expectations “should come as no surprise” to investors, he added, calling Ferrari’s results “Groundhog Day”, though he said some investors might be disappointed that guidance was only raised slightly.
Ferrari shares slipped just under 2 per cent to €284.5 following the release.
“Higher revenues and margins from a greater options uptake is expected to be offset by continued cost inflation” as well as higher accounting costs as the company writes down investments from new models once they begin production, Roeska added.