The luxury vehicle maker’s shares have gained 77% so far in 2019 when others are scaling back; here’s its secret, writes Chris Bryant
The luxury vehicle maker’s shares have gained 77% so far in 2019 when others are scaling back; here’s its secretThe mood music in the car sector is pretty melancholy right now because of Donald Trump’s trade wars and rising technology costs. But Ferrari is dancing to a different tune, thanks to its wealthy customers.
The Italian company is making this look easy, but lifting sales while preserving exclusivity is a difficult balancing act in the luxury vehicles business; just look at the struggles of Aston Martin Lagonda Global Holdings. That company’s shares have dropped 66% this year while Ferrari’s have gained 77%, valuing the prancing horse at more than €28bn .
Even so, it has to spend heavily on factory equipment and technology development . That will always be an impediment to matching Hermès’s operating profit margins, which exceed 35%.
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