FERRARI to jump ship?

[grober]

According to REUTERS Fiat Chrysler are to spin off Ferrari, with an issue of a $2.5 billion convertible bond. The newly created FCA, Fiat Chrysler Automobiles which moved its primary share listing to New York earlier this month, wants to invest 48 billion euros ($61 billion) over the next five years to turn Jeep, Maserati and Alfa Romeo into global brands and rival Volkswagen (VOWG_p.DE) and BMW (BMWG.DE) by strengthening its position in the fast-growing and high-margin market for premium cars. Yet another player in the lucrative executive class sector----- Good Luck with that! Personally I feel that a small specialist company [volume wise] like Ferrrari is going to be very vulnerable on its own outwith the fiat umbrella.Fiat Chrysler to spin off Ferrari, issue $2.5 billion convertible bond | Reuters

 

[stevehg]

Personally I feel that a small specialist company [volume wise] like Ferrrari is going to be very vulnerable on its own outwith the fiat umbrella.

Since 2007, Ferrari has been the only thing keeping the Fiat Group afloat. It's only in the past year that Chrysler has moved back into the black and is also now contributing.

You also wonder how Maserati would cope without using Ferrari tech and know how.

Lastly some of the volume numbers being thrown around for Alfa Romeo in the next six years are laughable and are just not achievable with current range and strategy. It needs a huge leap of faith to buy into those numbers, something which I think the markets lack when it comes to Fiat Chrysler group as a whole. I suspect that this has something to do with the Ferrari spin off. A way to raise cash to invest in replacement of funds that the markets are unwilling to raise for you. If I was a preferential shareholder, they wouldn't get my vote to go ahead.

cheers, Steve

 

[John Jones Jr]

You also wonder how Maserati would cope without using Ferrari tech and know how.

I don't they would cope.

I think Alfa is a wasted brand, always reckoned that if it was taken under the wing of Ferrari rather than Fiat it could improve sales & image no end. I'd like to get back into Alfa ownership again sometime but without the massive Fiat input.

 

[rsk21]

It's only a 10% stake in Ferrari being spun out. Marchionne is treating it a bit like an equity release scheme in order to generate cash.

The prospect of a divorce between Ferrari and the rest of Fiat SPA is not an issue at present.