Ferrari Has a Scarcity Problem

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00:00The LaFerrari hypercar you see behind me at the classic Ramiz collection in Berlin

00:04is one of only 499 ever built. Ferrari's luxury business model is all about such scarcity. It

00:11seeks to build fewer vehicles than the market demands, allowing it to charge high prices.

00:16Ferraris are certainly getting more expensive, but some models aren't that rare. Owners who

00:21want to resell their sports car on the second-hand market could be in for a shock. Let's look at

00:26some numbers. The cheapest new Ferrari now costs around $280,000 and that's if you don't want a

00:33five-figure custom paint job at the new F80 hypercar that's roughly $4 million or well over double the

00:39price of the LaFerrari it replaced. The company's average selling price is around 50% higher than

00:45its rival Lamborghini and four times higher than Porsche. This is great for Ferrari's bottom line

00:50and has made it Europe's most valuable automaker despite the recent sell-off. So Ferrari has made

00:55investors happy, but some of its customers have reason to grumble. Let's say you bought a plug-in

01:01hybrid SF90 Stradale a few years ago. You might want to look away. Some are now selling for 30% less

01:08than new. That's potentially a $200,000 hit and part of the loss is customization. It's a huge

01:14moneymaker for Ferrari, accounting for around 20% of automotive revenue. Dealers are even incentivized

01:21to sell special paint and carbon features, but not everyone wants the same specs you do, especially

01:26the second time around. Ferrari's answer to all this is to sell fewer cars than its investors might

01:32wish. It's slowing sales growth, producing comparatively few cars in each model range and

01:37scaling back its electric strategy because most clients are skeptical about EVs. This should help

01:44protect resale values and give its wealthy customers the feeling they own something few others can buy.

01:50To remain Europe's most valuable car brand, Ferraris must be expensive, but they also need to remain

01:56scarce.