A rare glimpse of the Ferrari factory - article

Chaseme · Jan 21, 2011

The race Ferrari dare not lose: A rare glimpse behind the closed doors of the legendary Maranello factory

Jan 16, 2011
by Ben Oliver

The most celebrated car marque in the world is expanding - fast. But will theme parks, high street stores and branded bathrobes kill off its rivals...or destroy its mystique irrevocably?

A Ferrari California on the final stage of the production line at the firm's Maranello factory

Officially, it’s just a factory: a medium-sized manufacturing concern with around 3,000 workers. Its inputs are the same as countless other factories: steel, aluminium, rubber, glass and plastic. But inside, by some unfathomable alchemy, these are turned into some of the most venerated and viscerally exciting products imaginable: the Ferrari road and race cars that have dominated F1 circuits and boys’ bedroom walls for more than 60 years.

It’s more than just a factory, more than just a supercar maker. It’s the headquarters of the national team: Ferrari is Italy, Italy is Ferrari. The cluster of low buildings the company has occupied on the Via Abetone in Maranello since Enzo Ferrari founded the company in 1947 are a place of pilgrimage for the tifosi, Ferrari’s borderline-obsessive fans.

They stand at the gates, photographing the cars as they emerge for their final road test, spearing towards the hills with a hard, hollow howl. Outside, there are Ferrari-themed cheap gift shops, and touts offer a drive in an overworked Ferrari F430 for an extortionate fee. You can visit the official Ferrari Store and its Galleria museum, for a price. But you don’t get through those gates unless you’re a client. And that makes the price of admission £143,870 at the very least.

The Nuova Meccanica building (left): crankshafts and engines are milled from solid aluminium billets in here. The engine (right). All major parts are made on site before being 'dressed' into a complete unit. Each V12 is assembled by a single craftsman

But Live has been granted rare access to the factory. We’ll be accompanied by a minder and have strict instructions on what we can photograph: nothing related to the Formula 1 team, for instance, and we can only take photographs of the production line from the side and not down its length in case you get the impression that Ferraris are mass-produced.

Ferrari takes itself and its image very seriously. But it’s worth the inconvenience. This is a fascinating time to be here; possibly a pivotal moment in the company’s history. Its aloof, exclusive image is changing. And now it appears the national team might even be for sale.

Ferrari has problems and they all spring from the company’s eternal dilemma – how to eke more profit from one of the world’s greatest brands, when being seen to exploit it might kill it stone dead.
The entrance hasn’t changed much since the Seventies: Niki Lauda and Gilles Villeneuve would recognise the red ochre walls and the yellow Ferrari sign. It looks out over the Via Abetone to the famous Cavallino restaurant, where Enzo’s private dining room has been kept as it was when he died in 1988. Once you’re through the gates you’re left in no doubt as to where you are.

The driveline, brakes and suspension (the mechanical package) are brought together before being fitted into the car

The Ferrari name and cavallino rampante – prancing horse – logo are everywhere: on the staff bus, the bins and even the bicycles ridden by office workers along the factory’s internal roads, each named after a Ferrari hero: Viale Enzo Ferrari, Via Niki Lauda.
The buildings are an odd mixture; humble post-war offices and workshops originally occupied by Enzo now stand next to the work of some of the world’s greatest architects, commissioned to ensure the ever-expanding factory looks as good as the cars it makes.
We start in the Nuova Meccanica building, finished in 2005, and where the major engine components are made. It’s big – half a football field in size – but temperature, humidity, light and noise levels are constantly regulated, not least so the workers can concentrate harder on your engine. The walls are emblazoned with pictures of some of Ferrari’s greatest engines, and a row of real ones borrowed from the museum line a balcony overlooking the plant. The engines look almost as good as the cars, with their double-row of upturned, polished aluminium trumpets to suck in the air and their red crackle-finished cam covers.

The individual components are not bad either, among them the massive but beautiful and intricate crankshafts, and cylinder heads milled with sub-millimetric precision from a single billet of aluminium. The finished parts are arrayed on trolleys parked often at odd angles around the factory, each with a bit of paper tied on or stuffed into a crack to let someone know what it is and where it needs to go.

And then we spot it. Sitting on its own on a pallet with a big ‘Don’t Touch’ sign scrawled in Italian is an end-plate from next year’s F1 engine. The minder tells us not to photograph it, although Ferrari’s bosses would hardly be displeased with evidence that every road-going Ferrari’s engine is made alongside those used by Massa and Alonso; no other car-maker with a grand prix team can make the same boast.

Next, it’s the new assembly line. The bodies are made in Ferrari’s Scaglietti coach-building plant in nearby Modena and then trucked to Maranello. Ferraris are still handbuilt. There are plenty of robots in the Nuova Meccanica to mill and drill the solid aluminium, but there’s only one robot used on the assembly line; it fits the windscreen.
Everything else is fitted to the car by hand, though Ferrari has done everything it can to make life easier for the technicians. So the body is picked up by a giant cradle, which carries it around the assembly hall, and at each workstation raises, lowers or swivels it so staff can fit another helping of lightweight, beautifully finished and staggeringly expensive components without stooping or straining.

The entire drivetrain – engine, gearbox, driveshafts, even the suspension and brakes – is assembled outside the car, and driven to meet the body by a weird, low, grey robot that seems to glide an inch off the ground because its wheels are hidden
Your Ferrari is really born here, when the robot delivers the drivetrain to the body and it’s lifted up and into the engine bay. What has just been created will be driven and cherished for a long, long time; Ferraris seldom get scrapped. It seems a bit short-sighted of Ferrari to allow only clients inside here; to see a Ferrari being made is to want one. You want it to be your choice of colour and stripes and trim and crests; your choice of components on the long list attached to every car and in the red cabinets that follow it as it’s being made.

The body is picked up by a 'cradle', which carries it around the assembly hall

A Ferrari California is born - the body and mechanical package after the 'marriage' in the cradle
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Continued...

Chaseme · Jan 21, 2011

Continued

Today a group of clients is also being shown around. They’re easy to spot; big watches, driving shoes, shades even in winter, and a calm sense of entitlement. From paying the deposit it takes up to two years for your car to be made; you’ll be invited to visit the factory a few months before it’s due, but this isn’t just Ferrari being hospitable. You’ll be invited into the ‘atelier’, a sort of super-showroom, where a consultant will explain the ‘personalisation programme’ – your car’s features.

The more popular options can be ‘built’ into a complete virtual car on the vast touchscreen; you can sit in all the different seats Ferrari offers and handle and match samples of all of its paint colours, leathers and carbon trim. But if you can’t see what you want, Ferrari will make it for you – at a price – as long as it doesn’t alter the car’s safety or engineering, and you don’t change the company’s iconic shades of red or yellow. The average customer spends around £15,000 in here.

But this is as far as the average customer will get. Buying a £207,000 599 GTB Fiorano doesn’t buy you much access to Ferrari. It sells more than 6,000 cars each year, so you’re not that special. To really get inside Ferrari, you need to be a ‘super-client’, like American tycoon James Glickenhaus, who commissioned his own unique Ferrari from coachbuilder Pininfarina.

Or U.S. car-dealership magnate Phil Bachman who, when I spoke to him, couldn’t remember how many Ferraris he owns and had to ask his wife. Or Chris Evans, who set an auction record for a Ferrari road car when he paid £5.5 million for James Coburn’s 1961 California in 2008, and last year paid a reported £15 million for a 1963 Ferrari 250 GTO.

Spend that kind of money and Ferrari comes to you. It takes you to grands prix, tells you about its new models and special editions before anyone else gets to hear about them. And Ferrari’s Classiche division, next to the atelier, will make every classic-Ferrari daydream come true. Classiche’s archive has 22,000 documents, mostly hand-drawn, detailing virtually every part Ferrari has ever made, and it can build an entire new engine from any era from scratch.

One wealthy client sent two unloved early Eighties Ferrari 400s in for total restoration, spending three times what they’re worth, just because he likes them. A Japanese collector has flown his 250 SWB over. It’s worth £3 million and looks perfect, but he still wants a total restoration.

In one corner sits a single-seat Fifties race-car, stored for an Austrian collector who flies down to Maranello every two months and does three laps of Ferrari’s Fiorano test circuit next door. Up on a hydraulic lift is a Ferrari California Spyder, the same model Chris Evans bought for £5.5 million. And there, under a dust-sheet is – although they won’t confirm it – Evans’s 250 GTO, which is being painstakingly restored to perfection in the place it was first made.

Despite all this, Ferrari has problems. It could sell far more cars than it does now but can’t put thousands more on the road without losing the exclusivity that makes us all want one. Plenty of devoted customers would happily pay double what they do now for their cars, but Ferrari can’t rack up the prices without looking greedy. And there are millions who can’t afford a car but will buy anything plastered with the prancing horse – but Ferrari can’t cater for them all without looking tacky.

The first problem – how many cars it can build without losing the exclusivity – has been solved by geography. Until recently, Ferrari said it would never build more than 5,000 cars a year, but that cap has been dropped. The firm knows that it can sell more cars in markets where there were previously very few Ferraris without devaluing the brand in Europe and America.

In the first half of 2010, sales in China rose 20 per cent. This year it will build more than 6,000 cars; pundits predict volumes will climb beyond 7,000 in the next few years as the economy recovers, with almost all the additional cars going to emerging markets.

The second problem – finding new ways for spendthrift car buyers to throw money at Ferrari – is being solved with a series of new activities. In addition to customising the car, clients can now buy and run an old F1 car with the Corse Clienti programme, become a factory test driver by buying an extreme, track-only FXX or 599XX, do a season’s racing in a F430 Challenge, learn to drive better on a Pilota course and choose from a range of hugely expensive accessories.

But it’s Ferrari’s approach to the third problem – what to sell those fans at the gates, and how much access to give them – that is causing the most controversy. From the first official Ferrari store in Maranello, there are now nearly 40 around the world, including one on London’s Regent Street, selling everything from Ferrari-branded deodorant to surfboards. And it has now entered the world of the theme park with Ferrari World in Abu Dhabi.

Opened late last year by Fernando Alonso and Felipe Massa, the park features some suitably exciting rides such as Formula Rossa, the world’s fastest roller coaster, which accelerates you to 60mph in less than two seconds and on to around 150mph.

But there are also rides the Ferrari faithful will be more embarrassed by, like Made In Maranello or The Racing Legends, in which you are propelled with seven others in a box on wheels past a series of films and installations that tell you in laboured and simplistic terms exactly why Ferrari is so great. Or Junior Grand Prix, in which children can drive miniature electric F1 cars into each other at very low speeds.

The finished dashboard unit, made to the client's spec. Red covers protect F1-style paddle-shifters

Final body trim parts are fitted

The body awaiting the windscreen - the only part fitted by robot. The rest is handmade
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Continued...

Chaseme · Jan 21, 2011

Continued

The tifosi are, to say the least, perplexed. For most of its history, Ferrari simply did what it was best at. It was aloof and inaccessible; Ferrari doesn’t advertise or sponsor celebrities or, until now, attempt in other ways to persuade us to want it. So it’s not just Ferrari’s decision to build a theme park that tifosi find worrying, but the absolute about-face in its attitude to access.

Ferrari is in danger of making the world’s most famous marque commonplace. It could destroy the devotion it has spent six decades earning and puts in jeopardy the huge financial value attached to that devotion – just when parent company Fiat is considering cashing in.

Fiat Group Automobiles, which includes Fiat, Ferrari, Lancia and loss-making Alfa Romeo, makes around £500 million each year. But Fiat’s iconoclastic CEO Sergio Marchionne is convinced the company needs to be truly global to survive. So he negotiated a keen deal to take a stake in Chrysler, in return for the small-car technology that Fiat does so brilliantly and which recession-battered American buyers want badly. Marchionne has the option to increase Fiat’s stake in Chrysler to 51 per cent, but he needs cash to do it. There’s one obvious source.

Doors are painted with the car, then trimmed separately before being fitted back to the same car at the end for a perfect paint-match

Fiat Auto makes over two million cars each year and is valued by Morgan Stanley at around £2.6 billion. Ferrari is worth £3.1 billion, because its sales and profits are growing, and its brand has what one analyst described as ‘magic dust’. So Marchionne is seriously considering selling the national side, with an IPO – flotation – as soon as this year.

‘Selling part of Ferrari to invest in bankrupt Chrysler doesn’t seem like a great trade off,’ says Max Warburton, auto industry analyst with Sanford Bernstein.

‘But their view is that they’re buying Fiat a future. Fiat’s management have a very clear plan to take control of Chrysler and they need a couple of billion dollars to go to 51 per cent. Other than selling Alfa Romeo, a Ferrari IPO is the only other logical way to raise money quickly.

‘But they would be looking to keep control. Partly for emotional reasons; this is one of Italy’s great assets. But also for the rational reason that this is a profitable, growing business and they don’t want to exit it.’

So you might not be able to buy a Ferrari, but you could soon buy a share in the firm. But what will you be buying? What is Ferrari? Is it still a supercar maker and race team or is it a merchandising operation more interested in mugs and theme parks?

‘It wasn’t always like this,’ says David Piper, 80, a Ferrari racing legend. In his thirties he was a wealthy privateer racer; he lost half a leg in an accident in 1970, but kept racing, and kept coming to Maranello to buy his cars.

His vast, terrifyingly powerful 1971 512M sports-racer sits in Ferrari’s Galleria museum, still bearing his name. ‘It used to be pretty impoverished here. The Old Man went through tough times keeping the show on the road. I first came here to see him in 1962 and Mauro Forghieri (Ferrari’s chief engineer) came out and said that the Old Man was rather busy. It was cold, so I asked if he could turn on the heating while I waited. Forghieri apologised and told me they couldn’t afford the oil.’

Things are different now. Ferrari’s full-year results are likely to show profits of over £200 million on sales of around £1.5 billion. But Ferrari won’t say how much of its business is now going on racing and selling cars, and how much on selling mugs.

There are a few clues in the figures it chooses to release; in the third quarter of 2010, car sales were up four per cent but profits up 46 per cent. It doesn’t state any absolute figures, but income from licensed, Ferrari-branded products was up ten per cent, Ferrari Store revenues 30 per cent, and online sales of merchandise 55 per cent.

‘We know exactly how much the other activities are worth, and it is significant,’ says Ferrari managing director Amedeo Felisa.

‘But if I told you how much it is, you’d be able to work out how much we make on the road cars, and how much Formula 1 costs us. And then I’d lose my job, and I have a family.’

Analyst Max Warburton, a man known to have the ear of Fiat’s Marchionne, doesn’t know either. ‘Some people talk about Ferrari’s non-car activities now being 30 per cent of its revenues, which seems on the high side to me, but it could be that this new theme park is a game-changer.’

But does it matter if Ferrari is selling more mugs and umbrellas to its fans, opening more stores, and a theme park?

‘I have a gut feeling it’s an extremely risky thing to do,’ says Warburton. ‘But they’re not daft. They must have done their homework and realised that selling more merchandise won’t affect the price point of a 599.’

Get inside the gates and there’s no question that Ferrari is as serious as it ever was about its road and race car business, and it’s obvious how closely the two are linked: the incendiary shriek of an F1 car being run at the test track, clearly audible all around the factory, makes the point.

Very few people get to witness this, but our obsession with the marque has to start somewhere, the sight or sound of a Ferrari. I doubt that in 25 years’ time many Ferrari buyers will say that their obsession with the brand began with being bought a cuddly camel in a Ferrari World outfit.

The final product: The Ferrari California. The company is likely to show profits of over £200 million on sales of around £1.5 billion
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Tire Shredder · Jan 21, 2011

cheap bastards didn't paint the inner door skins!

it's all about percieved quality.... better in a lot of areas but at the core, very similar construction processes (and thus money investment) as the big American manufactures, and yet the price tag is many, many times higher.

don't sell many car,s but they make a ton on each one of them.... good way 200 million euros profit a year!

Trents_goat5.7 · Jan 21, 2011

That would be an awesome job.

Peugeot · Jan 22, 2011

A brand and it's stored value of earned goodwill is the most important thing an automaker has going for it.

It's a slippery slope when you start devaluating it for short term profits.

Those of us old guys remember Bell + Howell as the standard of A/V back in the day. Now, they make and sell nose hair clippers sold on late nite blue screen informertials. There was many old line American brands. Fischer, RCA... I'm sure others could name more.

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