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Ferrari makes 86,000 Euros of operational margin on every car

Written by Nizam Shaikh

Long before the COVID-19 global pandemic, the auto industry was on a declining trend and the lockdown due to the CoronaVirus outbreak, which forced a temporary suspension of production and sales of motor vehicles made matters from bad to worse. Data from 28 leading carmakers shows an 11% slump during the FY 2018-19 in operational profits. 

Sales volume in the Indian market also saw a decline with the global economic slow down combined with new stringent BS6 emission compliance norms which bumped up the car prices especially in the diesel segment. Similarly, China was affected with reduced profit margins as a result of the implementation of new policies, a decrease in vehicle subsidies and implementation of China VI emission norms. While Toyota led the operating profits Volkswagen Group became the biggest carmaker by unit sales. But, in terms of performance Ferrari and Tesla showed double-digit figures. 

According to a report, Ferrari sold 10,131 cars in the last year and registered 23.2% operational margin with each unit worth close to EUR 86,000. The brand is likely to have made the profit margin by marketing its vehicles, adapting to the market and adopting new technologies. 

To put things into perspective, to equal the earnings from a single Ferrari, Mercedes will have to sell 67 units, BMW will have to sell 30 units, Toyota will have to sell 44 units, Hyundai 135 units, JLR 207 units, Ford 908 units and Nissan will have to sell 926 units to match the earnings. 

At home the Auto Industry with slowed down sales combined with the lockdown due to the health situations in the country have seen a 51% drop in Year on Year sales in the passenger car segment while the Commercial segment has seen a negative of 88.1% as compared to the last year. 

Ferrari too is likely to be affected in 2020 and other auto manufacturers are likely to experience a slow flow of income for the entire year if the Government does not intervene to revive the auto industry.