Ferrari's grand plan to become a luxury lifestyle brand
- Ferrari has set its sights on becoming more than just a car manufacturer.
- The company aims to become more like Hermes and Prada by offering an entire lifestyle range, including vehicles.
- Fiat Chrysler, owner of the Ferrari brand, believes the move will add great value to the company.
Ferrari is about to become more than a luxury carmaker. Later this year the company plans to launch a complete lifestyle brand, which will include fragrance, clothing, accessories and more.
“Ferrari has all the elements to be considered a luxury-good manufacturer,” Chief Executive Officer Sergio Marchionne said at the Detroit auto show.
Following in the footsteps of luxury-product companies such as Prada and Hermes, Ferrari aims to boost its revenue stream considerably with the introduction of additional product lines. To make this possible, Fiat Chrysler plans to sell 10 percent of Ferrari’s shares to raise in the region of $5 billion.
However, there have been doubts surrounding Ferrari’s prospects of being rated as a luxury-goods company because of the higher costs of developing and manufacturing high-performance vehicles compared with making stylish handbags. Credit Suisse estimated Ferrari’s market value at 5.8 billion euros, while BNP Paribas said the company could be worth as much as 10 billion euros.
Even as a pure carmaker Ferrari has more potential and could “technically” boost production to 10,000 vehicles from 7,000 cars a year now, Marchionne said. That being said, Ferrari will always keep production below demand to preserve exclusivity, he said.
Ferrari was named the world’s “most powerful” brand last year by consulting company Brand Finance, beating even Apple. That kind of image will help Ferrari survive as an independent manufacturer, even in the auto industry where most luxury brands have sought shelter in larger groups like Volkswagen AG’s control of Bentley and Lamborghini.
“Ferrari is very strong and will manage to follow its way even alone,” Dieter Zetsche, CEO of Mercedes-Benz parent Daimler AG, said at the Detroit show. “The spinoff from FCA won’t damage the future” of Ferrari.
After listing 10 percent of Ferrari in the U.S., Fiat Chrysler will distribute its remaining 80 percent holding in the division to its own shareholders. Ferrari Vice Chairman Piero Ferrari owns the remaining 10 percent of the company. Along with the listing, Ferrari may sell bonds, said Marchionne, who is also the supercar unit’s chairman.
Gartner: Leaders Lack Skilled Smart Manufacturing Workers
With organisations rapidly adopting industry 4.0 capabilities to increase productivity, efficiency, transparency, and quality as well as reduce cost, manufacturers “are under pressure to bring their workforce into the 21st century,” says Gartner.
While more connected factory workers are leveraging digital tools and data management techniques to improve decision accuracy, increase knowledge and lessen variability, 57% of manufacturing leaders feel that their organisations lack the skilled workers needed to support their smart manufacturing digitalisation plans.
“Our survey revealed that manufacturers are currently going through a difficult phase in their digitisation journey toward smart manufacturing,” said Simon Jacobson, Vice President analyst, Gartner Supply Chain practice.
“They accept that changing from a break-fix mentality and culture to a data-driven workforce is a must. However, intuition, efficiency and engagement cannot be sacrificed. New workers might be tech-savvy but lack access to best practices and know-how — and tenured workers might have the knowledge, but not the digital skills. A truly connected factory worker in a smart manufacturing environment needs both.”
Surveying 439 respondents from North America, Western Europe and APAC, Gartner found that “organisational complexity, integration and process reengineering are the most prevalent challenges for executing smart manufacturing initiatives.” Combined they represent “the largest change management obstacle [for manufacturers],” adds Gartner.
“It’s interesting to see that leadership commitment is frequently cited as not being a challenge. Across all respondents, 83% agree that their leadership understands and accepts the need to invest in smart manufacturing. However, it does not reflect whether or not the majority of leaders understand the magnitude of change in front of them – regarding technology, as well as talent,” added Jacobson.
Technology and People
While the value and opportunities smart manufacturing can provide an organisation is being recognised, introducing technology alone isn’t enough. Gartner emphasises the importance of evolving factory workers alongside the technology, ensuring that they are on board in order for the change to be successful.
“The most immediate action is for organisations to realize that this is more than digitisation. It requires synchronising activities for capability building, capability enablement and empowering people. Taking a ‘how to improve a day in the life’ approach will increase engagement, continuous learning and ultimately foster a pull-based approach that will attract tenured workers. They are the best points of contact to identify the best starting points for automation and the required data and digital tools for better decision-making,” said Jacobson.
Long term, “it is important to establish a data-driven culture in manufacturing operations that is rooted in governance and training - without stifling employee creativity and ingenuity,” concluded Gartner.