Whenever there is a Ferrari auction, you can be sure that seriously wealthy automobile collectors will make their way to the auction house, hoping to take a vehicle with the prancing horse emblem home, be it a Ferrari limo, a Ferrari motorcycle or even a Segway PT i2 Ferrari. Ferrari is indeed a trophy brand, even for current owners Fiat. Perhaps that is why Fiat CEO Sergio Marchionne has announced that he believes the Italian car brand is worth over 5 billion euros (about $7.3 billion).
The number is huge given the carmaker’s recent performances. Ferrari managed profits of only $430 million in 2010. And the $7.3 million tag indicates that the label is worth 63 percent of the Fiat group, a conglomerate valued at $11.4 billion.
Given the numbers, Marchionne’s estimation of Ferrari’s value maybe a tad hard to swallow, but there is no forgetting that Ferrari is the exotic car. Its being valued at $7.3 billion suggests that the brand is worth 17 times its actual earning. That is huge even for a top-of-the-line luxury brand. Most are valued at an inflated figure of their actual profits, but it usually levels out at 12.7 times the amount.
Naturally, analysts and banks are not agreeing with Marchionne’s estimations of the worth of the prancing horse. According to most estimates, Ferrari should be valued at around $4.3 billion, not more. However, irrespective of the sum, banks seem rather keen that Fiat float an IPO for Ferrari to raise funds so that the former’s debt situation may improve. That in itself is indication that the banks believe that a Ferrari IPO could be a profitable venture. However, Marchionne is not biting the bait to list the company yet.
Via: Auto Blog