Latest / Boardroom Conversations with Fexingo: CEOs, Strategy, and Corporate Leadership Explained / How the Ferrari Board Cultivated Exclusivity and Brand Power
Transcript
- Lucas: Ferrari delivered just over thirteen thousand cars worldwide in 2025. That's roughly the same number it sold in 2019. And yet, revenue per car has climbed more than forty percent over that same period. Luna: So they are deliberately keeping supply flat while raising prices — and people are still waiting over a year to get one. Lucas: Exactly. And that tension between scarcity and growth is something the Ferrari board has managed with remarkable discipline. Most luxury companies talk about exclusivity. Ferrari's board actually enforces it — at the expense of quarterly volume targets. Luna: I want to understand how that works in practice. The board has to approve major capital allocation decisions — new models, new factories, electric investment. How do they say no to more volume when the demand is clearly there? Lucas: Let's start with the numbers that frame the board's thinking. Ferrari's gross margin hovers around fifty percent. Operating margin is above twenty-four percent — best in class among automakers. The board knows that if they doubled production, margins would compress. The brand would lose its halo. So the strategic mantra is: sell one fewer car than the market wants. Luna: That's a very specific philosophy. And it came from the top — from the founding family, through the Agnelli-Elkann lineage. Lucas: Right. Ferrari was spun off from Fiat Chrysler in 2015, and the board is chaired by John Elkann, who is the grandson of Gianni Agnelli. The Agnelli family, through Exor, still controls about twenty-four percent of the equity but has nearly forty-six percent of the voting rights. So the board has a long-term orientation that most public companies envy. Luna: And that ownership structure gives them the cover to ignore short-term pressure. They are not worried about an activist investor demanding they double production. Lucas: Exactly. But the board still faces real strategic decisions. The most consequential one in the last five years was the succession from Louis Camilleri to Benedetto Vigna in 2021. Camilleri was a luxury goods veteran — previously CEO of Philip Morris. Vigna came from the semiconductor industry, where he ran STMicroelectronics. The board made a deliberate bet on technology and electrification expertise. Luna: That was a shift. Camilleri had focused on brand and pricing power. Vigna is all about engineering and digital. How did the board justify that change? Lucas: They looked at the regulatory environment. By 2021, it was clear that Europe and parts of the U.S. were moving toward banning new internal combustion engine sales by 2035. Ferrari's V12 and V8 engines are the heart of the brand. The board knew they needed to electrify without losing the emotion. Vigna had deep experience in sensors and power management — critical for hybrid and electric powertrains. Luna: So they bet on a technologist rather than a luxury marketer. That's a board-level strategic pivot. Lucas: It was. And so far it's working. The SF90 Stradale, launched in 2023, is a plug-in hybrid with a thousand horsepower. It outsold the previous flagship, the F8 Tributo, by a wide margin. And in 2025, Ferrari unveiled its first fully electric model — the Ferrari E — with a target of forty percent of sales being electric or hybrid by 2030. Luna: But that creates a tension. If Ferrari goes electric, doesn't it risk losing the sound and the feel that made the brand iconic? How does the board think about maintaining the intangibles? Lucas: That's the core challenge. The board has a brand committee — a subcommittee that reviews every product decision. They don't just look at engineering specs. They test prototypes with longtime owners. They measure emotional response. For the electric car, I've read that they spent years developing a custom sound profile — not fake engine noise, but a signature electric whine that still feels like Ferrari. Luna: So they are applying the same scarcity discipline to the EV. They are not going to flood the market with electric Ferraris. They will keep production capped. Lucas: Exactly. The board approved a new factory in Maranello — the e-building — dedicated to hybrid and electric production. But they didn't expand overall capacity. They are replacing some internal combustion lines with electric ones. Total output stays at roughly fourteen thousand cars per year. That is a board-level constraint. Luna: It's almost like they are managing a luxury watch brand, not a car company. Lucas: That's the analogy. And it extends to how the board thinks about pricing. Ferrari does not discount. Ever. The average selling price in 2025 was around four hundred thousand euros — up from about two hundred ninety thousand in 2019. That's not just inflation. That's the board approving price increases that track with brand desirability. Luna: And they do that without alienating their loyal customer base. Because the customer knows the car will hold its value. A used Ferrari often sells for more than the original sticker price. Lucas: That's the ultimate proof of brand power. And the board protects that resale halo fiercely. They monitor the used market. If they see too many cars being flipped, they will blacklist those buyers from future allocations. They have a database of customer history. Luna: That is intense. But it also shows how the board views the customer relationship as a long-term asset, not a transaction. Lucas: And it's a direct reflection of the Agnelli family ethos. John Elkann once said in an interview that Ferrari is not a car company — it's a luxury brand that happens to make cars. The board operates with that mindset. Every meeting starts with a review of brand health metrics, not just financials. They track wait-list lengths, customer satisfaction scores, and social media sentiment. Luna: I want to talk about one more thing: the board's composition. Ferrari's board has twelve members. Who is on it and how does that shape decisions? Lucas: It's a mix of Italian industrialists, luxury goods executives, and a few outsiders. Piero Ferrari — the son of Enzo Ferrari — sits on the board and holds a ten percent stake. He is the living link to the founder. Then you have executives from Exor, like Elkann. There is a former CEO of Yves Saint Laurent. There is a professor of mechanical engineering. And there are two independent directors with strong financial backgrounds. Luna: So you have brand guardians, technical experts, and financial discipline all represented. Lucas: Exactly. And the board meets six times a year — not just quarterly. They spend significant time on brand strategy and product roadmaps. I have read that they personally drive every new model before it is approved for production. That is not typical for a car company board. Luna: If these conversations have helped you think differently about how boards actually shape brand strategy, it's worth noting that this show is completely listener-supported — no ads, no sponsors. And if you find that valuable, you can help keep it that way at buy me a coffee dot com slash fexingo. Just a small gesture from people who get something out of it. Lucas: Yeah, and it genuinely makes a difference. Keeps us independent. Anyway, back to Ferrari — the board also has to think about racing. Racing is the brand's soul. But it's also expensive. The F1 team alone costs several hundred million a year. Luna: How does the board justify that spending when they are so disciplined about everything else? Lucas: They see it as marketing. Ferrari's F1 program is essentially a loss leader that fuels the brand halo. The board approves a separate racing budget that is ring-fenced from the road car business. But they have also imposed a cost cap on the racing team — not just the regulatory one, but an internal one. They want to win, but they want to win efficiently. Luna: So the same discipline applies. They are not going to throw unlimited money at F1 just to win. Lucas: Right. And that's the thread that runs through everything the Ferrari board does: they are stewards of scarcity. They say no more often than they say yes. And in a world where most companies chase growth at any cost, that restraint is the source of their pricing power. Luna: It's also what makes the brand feel exclusive to the customer. When you finally get the call that your Ferrari is ready, you feel like you've joined a club. Lucas: Exactly. And that feeling is worth billions. The Ferrari board knows that better than anyone.