In an example of the radical changes taking place in the global automobile market during the coronavirus crisis, Ferrari, which makes about 10,000 usually very expensive cars a year and has about 3,300 employees, is now worth more than General Motors, which churns out 7.7 million vehicles a year and had 164,000 employees as of last December.
Recent stock prices not only put Ferrari’s market capitalization ahead of General Motors but also Ford.
Even during the coronavirus pandemic which shut down Ferrari’s entire production in early March, sales for the first quarter of the year managed to increase by five percent to 2,738 units.
The company has just announced the restart of its factories in Maranello and Modena on Monday, and are expected to return to full production on Friday.
On the back of such strong results and an optimistic outlook for the future, Ferrari’s market capitalization hit $30.1 billion in early trading Monday, after settling back to $29.8 billion later in the day.
General Motors’ market cap fell to under $29.3 billion while Ford’s fell to $19.2 billion. Fiat Chrysler, which spun out Ferrari in 2015, has seen its market cap decline to under $13 billion.
Ferrari’s share price has more than tripled since it went public.
Besides a massive brand name, Ferrari’s other attractive feature as a company as its profit margins are unusually high for the automotive industry. It has an average profit margin of nearly 24 percent compared with a five percent industry average.
The company’s current model lineup ranges from $215,000 on the “cheap” end of models like the Portofino while the top-of-the-line 812 GTS, also known as the SF90 Stradale, the most powerful ever model of the Scuderia putting out 989 horsepower, prices in at $1 million a pop.
But don’t get too excited. The Stradale is already sold out.
On top of all that, during a recent call with investors, Ferrari CEO Louis Camilleri said that while there have been “several cancellations” of car orders in the U.S. and Australia, “so far there are no red lights flashing in any geography.”
Apparently, the coronavirus has done little to dent the appetite for luxury cars from the world’s wealthiest.
Title image: The $1 million Ferrari 812 GTS. (source: Scuderia Ferrari S.p.A.)