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Ferrari taps the region's luxe sweet spots - from Singapore
WITH another roaring F1 racing season just over in Singapore, Italian luxury sports car manufacturer Ferrari is on a roll in the region that it serves from here. While Singapore is Ferrari's regional office for the Far East since 2013, it is now responsible for the Middle East and India as well.
Ferrari's local regional office oversees a total of 17 markets from Singapore, and its share is around 24 per cent of Ferrari's global market in terms of volume. And the business outlook is good.
"Singapore is geographically a very central location and the proximity to the South-east Asian markets allows us to be close to our customers and importers. The Singapore regional office was set up in February 2013. At that time, we were spun off from the Asian regional office located in Shanghai, China, to create two areas of responsibility, one for Greater China and the other one for the rest of Asia. Besides South-east Asia, we are also responsible for the regional subsidiaries in Australia, Japan and Dubai," says Dieter Knechtel, chief executive officer, Ferrari Far & Middle East.
While the function heads and senior management are located in Singapore, the operational teams are located in the various subsidiaries. "Singapore is a symbolic place for Ferrari as it is a country with many achievements, a lot of high net worth individuals, and Ferrari is the market leader here in the sports car segment. We have been very successful in the sales of our range of models but we believe that in the long run, further potential can be seized by increasing our engagements here and around the region," he adds.
The Ferrari brand was established 71 years ago on March 12, 1947, when the very first Ferrari, the 12-cylinder 125 S, emerged from the factory at Maranello for its maiden test drive with founder, Enzo Ferrari, himself at the wheel. That day marked the start of a story of a manufacturer who, from the very outset, melded racing technology with highly exclusive and unparalleled cars.
By the end of the 1940s, the Ferrari name had come to symbolise a dream for private owners who are victory-hungry racing enthusiasts and who wanted to drive outstanding cars. Ferrari has always been a protagonist in the automotive industry: on the tracks and on the roads. The business model has always been related to exclusivity and as Enzo Ferrari used to say: "We always sell one car less than what the market demands."
Going forward, Ferrari is investing to sustain its growth, shares Mr Knechtel. "Our confidence rests on a number of key pillars and these include the unique strength of our brand and its unparalleled history. Everything we do and will do is and will always be rooted in and inspired by the values, ambitions and creativity of our founder.
"We will add a number of magnificent new models over the next five years and for us maintaining exclusivity will always be one of our main guiding principles," While Ferrari's Southeast Asia market currently includes Singapore, Malaysia, Thailand, Indonesia and the Philippines, there are plans to enter Vietnam soon. The other markets in North-east Asia are Japan and South Korea, where Japan is its largest market in Asia.
"There is a very strong customer base there and a lot of history, where we have been present for the last 52 years. In South Korea, it is one of our rising stars where we have lots of success with Ferrari there, and we plan to do even more in this market," says Mr Knechtel.
In Australasia, which includes Australia and New Zealand, Australia is one of Ferrari's most important markets as it has seen very strong growth with record sales over the last few years. "This year, we will have three new points of sale in Australia bringing the total number to nine. With this setup, we have a very strong structure that can sustain the ambitions that we have for the market in the coming years," says Mr Knechtel.
The office in Dubai oversees the Gulf, Lebanon and India with a network of nine dealers. "Ferrari has been very successful in the Middle East and we have a fantastic customer base with lots of collectors. The brand is more than just numbers; Ferrari speaks to the emotions. Our customers really understand the passion and excellence of the Ferrari DNA. We are not aggressive in our sales strategy, but are focused on the delight and enjoyment that Ferrari can offer," says Mr Knechtel.
As for the popularity of the Ferrari cars, Singapore and South-east Asia in particular, prefer the sports cars such as the V8 range of 488 GTB and 488 Spider."For Japan and South Korea, our Gran Turismo range is proving more popular with the new products coming into the range. For example, the California T has introduced around 70 per cent of new customers to the brand and was highly successful. This success has continued with the new Ferrari Portofino which is very well received," says Mr Knechtel.
In Australia, it's typically a sports car market but the response to Ferrari's GT cars has been equally good. In the Middle East, it's predominantly a sportscar market - very masculine, traditional and performance-orientated. However, the Portofino has proven to be a success as well in this market, with sales doubling during the first year of presentation, he adds.
"Ferrari is lucky in that we can operate in pretty much any market and economic environment. Based on our studies, and whatever the climate, we are always looking to impress and win the hearts of high net worth individuals."
Based on the high momentum achieved in Australia and South Korea, he believes that Ferrari has much more potential for the future. "The business model of Ferrari doesn't provide cars immediately when the customers would like to have a car. We have a lot of demand in the world which we need to balance. Even in Japan, we are in a sweet spot between the financial crisis and the 2020 Tokyo Olympics which is a fantastic time of stability for us to sell cars. Ferrari is not about volume but rather our focus is on value and the protection of our client base," says Mr Knechtel.
"When our customers buy a Ferrari, they understand that the value of their car will be protected over time. The most promising car in our range is the Ferrari Portofino, where we have seen a successful launch everywhere and the demand from our customers has exceeded our expectations. The 812 Superfast is an extremely popular car with a V12 naturally aspirated engine, the strongest sportscar we have seen in the market. This is the pinnacle of what we can have in the Ferrari range and it is a highly sought-after car," he adds.
What makes Ferrari cars so special is that it is among the world's leading brands, focused on the design, engineering, production and sale of a luxury marque. "The Ferrari brand symbolises exclusivity, innovation, state-of-the-art sporting performance and Italian design. Its history and the image enjoyed by its cars are closely associated with its Formula 1 racing team, Scuderia Ferrari, the most successful team in Formula 1 history. From the inaugural year of Formula 1 in 1950 through to the present, Scuderia Ferrari has won 233 Grand Prix races, 16 Constructor World titles and 15 Drivers' World titles," says Mr Knechtel.
"Ferrari clients are discerning consumers and it's fantastic to see the enthusiasm and passion that the brand receives across the world. I find the clients incredibly knowledgeable and also well attuned to ideas of European heritage and tradition. This is the secret of Ferrari here I think - its unique Italian story and history of excellence, beauty and performance. No other car brand can really match us when it comes to marrying all these three attributes," he adds.
"A Ferrari is always the highest performing car in its segment and we always set benchmarks for the industry. Every time we launch a car, it is completely new in terms of performance, innovation and design. Ferrari is the brand that is able to protect exclusivity based on the business model that we operate in for each market. We produce cars based on customer orders and not on stock. Our focus is not on volume but on being exclusive. Once a Ferrari owner buys a Ferrari, he usually stays with Ferrari and builds his collection over time. That is what makes us so unique."
This year, Ferrari will produce around 9,000 cars worldwide.Ferrari just launched a new series, the Icona, in Maranello on Sept 18, comprising the Monza SP1 and SP2, which is a limited-edition car produced specially for its most loyal and best customers in the world.
Ferrari is a listed company since 2015 but that hasn't changed the way it works. "What is at the heart of the Ferrari brand is this intimate relationship between us and our clients. We continue to work harmoniously to maintain this special relationship with clients, with our partners and with our colleagues," adds Mr Knechtel.