• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 9 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 4 days Does Toyota Know Something That We Don’t?
  • 7 days OPINION: Putin’s Genocidal Myth A scholarly treatise on the thousands of years of Ukrainian history. RCW
  • 4 days World could get rid of Putin and Russia but nobody is bold enough
  • 3 days America should go after China but it should be done in a wise way.
  • 7 days CHINA Economy IMPLODING - Fastest Price Fall in 14 Years & Stock Market Crashes to 5 Year Low
  • 6 days China is using Chinese Names of Cities on their Border with Russia.
  • 7 days Russian Officials Voice Concerns About Chinese-Funded Rail Line
  • 6 days CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
  • 7 days Putin and Xi Bet on the Global South
  • 7 days "(Another) Putin Critic 'Falls' Out Of Window, Dies"
  • 8 days United States LNG Exports Reach Third Place
  • 8 days Biden's $2 trillion Plan for Insfrastructure and Jobs
Hydrogen Mining: The New Energy Transition Challenge

Hydrogen Mining: The New Energy Transition Challenge

French researchers have discovered a…

Ferrari Floored By Rising Commodities Prices

Ferrari NV announced that soaring commodity prices would begin affecting the prices of its new supercars. The average cost for an Italian supercar, made by Ferrari, is between $200k-$400k, making it one of the most expensive production automobiles globally (besides French supercar maker Bugatti). 

During a 60-minute earnings call with investors on Wednesday, Ferrari discussed better-than-expected fourth-quarter earnings as shipments jumped during the pandemic. However, the company explained that rising commodity costs would result in continued supercar inflation this year.

Susy Tibaldi, a luxury analyst at Swiss bank UBS, asked Antonio Picca Piccon, the CFO of Ferrari NV, since inflation remains persistent and 2021 was the first time the company increased prices by 2% due to inflation, "should we expect something similar in 2022?" 

Piccon responded, there "is some pressure on the energy on the aluminum cost and we will apply this price increase to consider for that, but we will also leverage."

"Other important levers when it comes to the pricing of the new model and selected. I mean a price increase of selected model and also the personalization. So this is an important factor we have factoring in Susy," the CFO added. 

Rising aluminum cost stems back to Europe's winter of discontent as rocketing power prices across the region shuttered four aluminum smelters which curtailed about half a million tons of annual capacity. European aluminum prices have surged more than 350% since the pandemic low in early 2020 to about 450 euros per ton. 

Ferrari uses a lot of aluminum, especially for its frames, engines, transmissions, body, suspension, paneling, and rims. The surge in prices will be pushed to the consumer as the company locks in about $155.5k profit on average per car this year. 

Slumping Ferrari shares seems to correlate with surging aluminum prices that would crush margins and reduce the stock's attractiveness.

ADVERTISEMENT

While, of course this doesn't necessarily imply causation - and we suspect the elasticity of demand for Ferrari is minimal - expectations for further increases in commodity costs (along with rising interest rates) will pressure the supercar maker's bottom line.

By Zerohedge.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News