Ferrari Jumps to Record as Formula One Team Regains Top SpotBy
CEO Marchionne has made F1 success one of his top priorities
Racetrack wins seen as essential to sustaining brand expansion
Ferrari NV rose to a record in Milan after Sebastian Vettel won the Australian Grand Prix, taking the Italian “scuderia” back to number one in the Formula One rankings after 27 races out of the top spot.
Shares rose as much as 3.6 percent to 68.5 euros, the highest since the Italian supercar-maker’s debut on the Milan exchange at the beginning of 2016, following its separation from Fiat Chrysler Automobiles NV and an initial public offering of a 10 percent stake in New York in October 2015. The shares were up 2 percent at 12:41 p.m., giving the company a market value of 12.7 billion euros ($13.8 billion).
Chief Executive Officer Sergio Marchionne has made revamping the Formula One racing team one of his top priorities at the Italian company, which moved its legal base to the Netherlands as part of the spin-off. Success on the track is seen as crucial to underpinning the brand image as Marchionne looks to widen Ferrari’s line-up and expand into non-automotive luxury goods.
“There’s nothing more important for a supercar-maker than winning the the most iconic racing event,” said Vincenzo Longo, strategist at IG Markets in Milan. “Formula One success adds another positive catalyst to Ferrari’s shares, which have been most preferred by analysts since the beginning of the year due to Marchionne’s expansion plan.”
Ferrari’s first Formula 1 win since August 2015 will help shore up the brand’s reputation for elite performance after the team fell behind Mercedes and Red Bull in recent seasons. Ferrari last won the overall title of the world’s premier racing circuit in 2008, and poor performances on the track were one of the reasons Marchionne cited to take over the carmaker from Luca Cordero Di Montezemolo in 2014.
A few weeks after that move, Marchionne outlined the plan to separate Ferrari from Fiat Chrysler and list the unit’s stock in New York. He then reshuffled management at Ferrari’s Formula 1 racing team and hired Vettel to replace Fernando Alonso as the top driver. Last year, he promoted Mattia Binotto to replace James Allison as chief technical officer.