The departure of Luca Cordero di Montezemolo from Ferrari has been rumoured for weeks. Today those rumours became fact. In a statement Ferrari’s parent company Fiat announced that the man who has run Ferrari for the last 23 years will leave the company on October 13.
Before I get into why this has happened and possible ramifications, it is perhaps instructive to reflect for just a moment on di Montezemolo’s time there. In the road car arena his achievements speak for themselves: according to Bloomberg Ferrari revenues increased ten fold on his watch. In sales terms not only did they increase three fold but are now controlled by supply rather than demand.
Key to di Montezemolo’s strategy for the company has been to cap volumes and, latterly, actually reduce volumes while increasing profitability and exclusivity. And as we shall shortly see, it is this approach that has brought him to blows with Fiat boss Sergio Marchionne.
On the race car side, di Montezemolo found himself running Scuderia Ferrari in 1974 at the age of just 26 and oversaw the team’s return to winning ways, capturing with Niki Lauda the 1975 F1 world title after an 11-year drought, then the longest in the company’s history.
After a chequered career in Fiat and elsewhere (among other achievements he ran Cinzano and headed the committee that hosted the football World Cup in Italy in 1990) he returned to Ferrari in 1991 to find a company with an underachieving road car division making largely unimpressive products and a race team deep in the doldrums once more. The road car business started to turn around from 1993 but it would be 1999 before Ferrari won the constructor’s championship again, a prelude to Michael Schumacher’s unprecedented run of five consecutive F1 world titles.
Since then the road car business has scarcely put a foot wrong but the race team has faltered once more, its last title coming in 2008 and the Scuderia suffering its least competitive season in 20 years.
Di Montezemolo’s statement seemed to suggest this lack of competitiveness in F1 as the true reason for his departure and while doubtless it played a role, it is important not to overstate its significance. Less publically discussed but no less real for that is the fact that he and Marchionne have fundamentally different agendas for the company.
Di Montezemolo wants Ferrari to stay exclusive and aspirational while Marchionne is believed to be intent on leveraging the Ferrari brand by increasing volume in his long-term vision of turning the Fiat Group of companies, which already owns the Chrysler, Jeep, Alfa Romeo, Ferrari and Maserati brands, into an entity to rival the runaway success of the Volkswagen Group of companies.
Marchionne (right) with Fiat Group VP John Elkann
Chief among concerns of Ferrari traditionalists will be whether the company will bow to the unquestionable commercial appeal of adding an SUV to the current range of two door coupes and convertibles. Marchionne will know the move will likely attract fierce criticisms from those who take di Montezemolo’s view than an SUV is simply too great a stretch for the Ferrari brand and long term is likely to do more harm than good.
On the other hand he will compare the company’s current position to that of Porsche at the start of this century and note that its fast track to significant global volume was achieved by an SUV which appears to have done the Porsche brand little or no harm at all. He will also know that if Ferrari does not go down this path, it will stand alone as Maserati, Rolls Royce, Bentley and even Lamborghini are already committed to building such cars.
As to where Ferrari might get an SUV platform from, the most obvious answer is from its sister company Jeep. The new Maserati Levante is known to sit on the same platform as the Grand Cherokee so it would seem likely to be adapted still further to fit a Ferrari brief, if Marchionne decides to go down this road. A Jeep-based Ferrari? It might sound a bizarre prospect, but it is entirely possible.
Fernando Alonso and Felipe Massa received Ferrari-style Jeep Grand Cherokee SRT8s in 2012
As for Marchionne himself who will ‘spearhead’ Ferrari in the future, he is widely credited as being the man who turned the Fiat concern around. On the other hand he has shown a less sure touch at Alfa Romeo which continues to consistently under-perform its potential while his strategy to re-launch Maserati as a rival to BMW, Audi and Mercedes is too new to say whether it will be a success or not.
I am not going to write off Marchionne before he starts. What I will do is salute di Montezemolo and observe that it would be perhaps hard to imagine the company in better hands than his, recent racing disappointments notwithstanding. Certainly his loafers will likely prove very hard to fill, and I wish Signor Marchionne all the luck in the world doing it.