Fiat Chrysler plans to separate Ferrari as its own company. The decision comes as the company attempts to distinguish this luxury brand and move it away from the mass-market, mainstream parent company. Fiat Chrysler, which owns 90 per cent of Ferrari, will achieve this goal by selling 10 per cent of its shares in a public offering while distributing the remaining 90 per cent among shareholders. The companys shares soared at the news.
I think we are doing the right thing by giving Ferrari a proper, unique place in the capital markets to be evaluated and valued as a luxury automaker, Marchionne told an analyst conference call.
Fiat Chrysler has struggled to compete with global giants Toyota and Volkswagen, and this separation will raise money to support the newly merged carmakers plans to invest $61 billion over five years to compete.
Marchionne refused to speculate on Ferraris value, saying only I think we will be pleasantly surprised.
The board intends to complete the spinoff during 2015.
A Ferrari spinoff had long been speculated by industry experts as Marchionne seeks to maximize values from the groups brands. Fiat Chryslers other luxury brands, including Alfa Romeo and Maserati, will remain part of the parent company, and are a key part of Marchionnes plans to focus production in Italy on higher-margin luxury cars.
The decision to break off Ferrari comes about two months after an awkward management transition at Ferrari that saw longtime chairman Luca Cordero di Montezemolo resign after a public spat over strategy with Marchionne, who has since taken over his job.
Marchionne has been vocal in his displeasure over Ferraris long absence from the Formula One car racing winners circle, and has pledged to get the team back to the top. The last time it won the drivers championship was in 2007.
I think we need to continue to protect Mother Goose, which is the production of cars, and we need to get back on the track and start winning again, which is part of the DNA of the house, Marchionne said.
Ferrari has limited production to 7,000 vehicles a year to maintain its exclusivity, and Marchionne said production would be increased only to match an expansion in the customer base.
Also Wednesday, Fiat Chrysler Automobiles N.V. announced it returned to a profit in the third quarter thanks to a good performance by its luxury brands and gains in North America and Asia.
It made a net profit of 174 million euros ($221 million) for the three months ending Sept. 30. That compares with a loss of 15 million euros in the same period last year. Revenues rose 14 per cent to 23.5 billion euros.
Ferrari and Maserati combined earnings before interest and tax were 484 million euros, up 55 per cent from a year ago.
Deliveries rose 9.7 per cent to 1.1 million vehicles. Marchionne said he expects 2015 volumes to rise 5 per cent above 2014 levels, to 4.7 million units, boosted by ramp ups in Jeep and Fiat 500 production and the launch of Alfa Romeo into the U.S. market next year.
