30.9.10

This article was written by David Jolly and appeared
on the New York Times website

PARIS — Fiat has its own means if it decides to seek a majority stake of Chrysler, and has no intention of selling its Ferrari unit to raise funds, the chief executive said Thursday.

“No, we have enough financial resources to do everything we have to do,” Sergio Marchionne, who heads both Fiat and Chrysler, said during an interview at the Paris Motor Show.

“We would consider selling a part of Ferrari,” Mr. Marchionne added, “but it’s not in the cards now, and I have no project on my desk.”

On Thursday, Ferrari presented its SA Aperta cars carrying a 670-horsepower V-12, its most powerful road-going engine ever. All 80 of the limited-edition cars, priced at around a half-million dollars each, have been sold, it said.

“With Ferrari,” Mr. Marchionne said, “we’re not selling cars, we’re selling works of art.”

The Italian daily Corriere della Sera reported Sunday that Fiat was considering selling a substantial part of its 85 percent stake in the iconic sports car maker, its most profitable brand, but planned to retain 51 percent. Piero Ferrari, son of the founder Enzo Ferrari, owns 10 percent of the company, and Mubadala Development, an Abu Dhabi investment fund, owns the remaining 5 percent.

Ferrari, which sells about 6,000 cars a year, was valued at €2.3 billion, or $3.1 billion, in 2005 when Mubadala paid €114 million for its stake.

Fiat is planning to raise its stake in Chrysler to 35 percent in 2011, from its current 20 percent, as the U.S. automaker returns to the stock market through a planned initial public offering. Fiat’s deal last year with the U.S. government to help Chrysler out of bankruptcy gives the Italian company the right to ultimately raise its stake to 51 percent, subject to meeting performance targets.

Mr. Marchionne expressed confidence that the I.P.O. would go ahead.

He said Fiat would exercise its right to buy back the Mubadala stake by the end of this year, adding: “We’ll either buy them out or they’ll convert their shares into something else.”

Luca Cordero di Montezemolo, the Ferrari chairman, said that Mubadala “will remain for us a very important industrial partner,” noting that the two companies were building a theme park in Abu Dhabi called Ferrari World Abu Dhabi.

The theme park, he said, illustrates how Ferrari is aggressively bolstering its brands and licensing business, an effort that could help give the company earnings stability as car sales fluctuate.

“We think this year, even if there is still a crisis around the world, we’ll have the second-best year in our history, after 2008,” Mr. Montezemolo said. “At the least, we’ll have double-digit growth in operating margin.”

The sports car maker’s business expanded sharply in the first half of the year, with second-quarter revenue growing 8.6 percent from a year earlier, to €448 million, and operating profit rising 10 percent, to €77 million. Sales grew 20 percent in China and 10 percent in the United States in the period from a year earlier.

The company, which has 200 auto dealerships, sells Ferrari goods at 38 shops, most recently adding stores in Johannesburg and on Park Avenue in New York. Mr. Montezemolo said he was aiming for 60 Ferrari retailers by the end of 2011. It also has partnerships with Puma and Mattel, allowing them to use its logo.

Some of the more exotic Ferrari store goods on display at the auto show included certified Formula 1 racing-car parts: chromed exhaust pipes, €6,000; a chromed crankshaft, €3,800; and a Colnago-Ferrari carbon-fiber bicycle for a cool €12,500.

Mr. Montezemolo said Ferrari started the licensing business “not for economic reasons, but just to protect the brand.”

By licensing, for example, Ferrari logo T-shirts, he said, he could ensure that when unauthorized knock-offs appeared, “then I don’t have to send my lawyer, the T-shirt maker will send his lawyer.”

The business has taken off, he said, contributing about 20 percent of its operating margin currently, from about 1 percent in 1997.