Lessons from Enzo Ferrari
Building an Automotive Powerhouse
“Aerodynamics are for people who can’t build engines”
Enzo – Ferrari
Childhood
At a very young age, Enzo showed signs of agency, and deep interest in unconventional things.
Where his brothers excelled in running and athletics, Enzo became obsessed with clay pigeon shooting, using a Florient rifle given to him by his father.
He was never interested in pursuing academics at school, nor was he academically gifted.
But at age 10, Enzo’s father took him to see his first automotive race.
Immediately, he was hooked.
By age 15, Enzo only had one dream.
“I’m going to be a racing driver”
Enzo’s First Job
After failing school, Enzo tried to get a job working at Fiat.
Working in the automotive industry would be his first step towards becoming a racing driver.
But he failed miserably.
So instead, Enzo took a job at a small vehicle repair shop run by an acquaintance of his father, working on transforming war vehicles into functioning automobiles for daily life.
By age 21 – Enzo had managed to complete his first race, placing twelve overall. Not a bad start.
The Founding of Ferrari Automotive
In mid 1945, following the the completion of WWII, Enzo commissioned Giachino Colombo to design a completely innovative car for him, founding what is known as Ferrari.
The goal - to beat Alfa Romeo, the team that Enzo had spent time racing for, and subsequently, working as sporting director for in the pre-war years.
Enzo believed that the engine was the heart of any car, with a focus on building an incredible power unit.
His choice fell on a 12-cylinder architecture - and the car would be known as the 125s.
Source - Ferrari History
Italy Bleeds Red
Pictured - The Tifosi - Scuderia Ferrari’s avid racing fans. Italians flock to Monza each year to watch Ferrari compete in the Italian Grand Prix.
Today, Ferrari is less of a car manufacturer and more of a cult.
Roughly 60% of Ferrari purchases are made by repeat customers, which makes their revenue incredibly stable.
Ferrari does no television advertising.
Instead, they do all of their advertising on the track.
Many automotive companies compete in F1 to build their automotive business.
Ferrari builds their retail automotive business to compete in F1.
After all - Scuderia Ferrari was founded before Ferrari ever built a vehicle.
A subtle distinction, but all the difference
The Prancing Horse
The Ferrari logo itself is emblematic of everything the brand represents.
The logo has deep roots, representing Francesco Baracca’s personal emblem during WWI, as Italy’s most accomplished airmen.
It is coloured Modena Yellow, the place where Enzo was born, and where the company was founded.
“It symbolizes boldness, a competitive spirit, a strong desire to succeed, and familial heritage
Scuderia itself is an Italian word that means ‘horse stables,’ and Enzo Ferrari wanted to bring the ‘racing stable’ to the people by allowing owner-drivers to participate in races.”
Source - Ferrari - The Branding Phenomenon
Financials
Ferrari’s financials are similar to their engines.
Unbelieveable.
The business has seen expanding EBITDA margins from 2015 – 2024, growing from ~26%-38% because customers are willing to pay more for best in class product and association with an iconic brand.
Their free cashflows have also been growing consistently, growing from 429m Euros in 2015 to 932m Euros in 2024.
Source - Ferrari Corporate
Key Insight
There a few brands that have stood the test of time.
Ferrari is one of them.
The business now has the luxury of pricing power that other car manufacturers do not, and an incredibly strong customer base that will continue to drive revenue into the future.
The financial returns of building a great brand are still under-appreciated
Forza Ferrari.
Enzo Ferrari Great Quotes
“The Ferrari is a dream - people dream of owning this special vehicle and for most people it will remain a dream, apart from those lucky few”
“I don’t sell cars, I sell engines. I throw the cars in for free, since something has to hold the engine”
“Second is the first of the losers”
“I have in fact, no interest in life outside of racing cars”
“I have never gone on a trip, never taken a holiday. The best holiday for me is spent in my workshops when nearly everyone else is on vacation”