Do you know how many cars were sold in Ferrari last 2021? 11,155 (+ 22.3% vs. 2020, +10.1% compared to 2019). These sales delivered a stunning 35.9% EBITDA. A record year. Amazing financial results. Good news that, however, are bringing concerns for the brand…

What is the primary concern for a LUXURY house when facing record sales? How to protect the brand’s luxury appeal. Avoid at any cost the loss of aspirationality due to massification. Their Board of Directors’ report states: “The value of our brand and our ability to achieve premium pricing for Ferrari branded products may decline if we are unable to maintain the value and image of the Ferrari brand, including, in particular, its aura of exclusivity”. Ferrari’s luxury cache would be compromised if its vehicles became as commonplace as the ones of other car manufacturers playing in the premium segment.

Luxury codes works regardless of category. Ferrari is not competing with metal-bashing automotive companies: Ferrari is playing in the same arena as luxury houses such as Hermès or Patek Philippe. And it looks it is doing really well: the brand is the world’s strongest luxury brand according to the Brand Finance Global 500 2021 ranking – with a Brand Strength Index (BSI) score of 93.9 out of 100. In addition to measuring overall brand value, Brand Finance also evaluates the relative strength of brands based on factors such as marketing investment, customer familiarity, staff satisfaction, and corporate reputation. ROLEX and Moncler ranked number two and three in this global 2021 ranking.

Future challenges for Ferrari are shifting to battery-power vehicles without losing the high performance that supports their premium pricing. Other rivals in the luxury car industry, such as Automobili Lamborghini S.p.A., Aston Martin Lagonda Ltd and McLaren Group, are also wrestling to face this challenge. Ferrari has promised its first all-electric car in 2025, while it has already rolled out three hybrid models.

Very interesting how Ferrari’s annual report highlights the importance of Formula 1 on building the brand (“Our brand image depends in part on the success of our FORMULA 1 racing team”). Luxury brands are DREAM BRANDS. They target people’s dreams. And Formula 1 is the best way to materialize a dream for many.

See the full 2021 Ferrari Report in the comments below.