What Oprah Winfrey is the giving away free cars, Sergio Marchionne is to promising to make automakers debt-free!
Marchionne told investors in a conference call today that the Italian sportscar maker will be debt-free a year earlier than he predicted, while pushing earnings to $2.5 billion by 2022. The sweater-wearing leader told FCA investors that the company would be debt-free by the end of the year.
He believed that the increased production levels and coming products, especially hybrids, EVs and the sport-utility vehicle will drive the increase in earnings.
The expansion of the Ferrari portfolio is designed to tap into a larger demographic. The prancing horse hybrid will arrive in 2019 and the long-rumored-now-true sport-utility is expected to arrive in 2020.
(Marchionne confirms plans for Ferrari SUV, hints at battery supercar. Click Herefor the story.)
Marchionne also mentioned that producing smaller engines was a possibility in future as long as Ferrari’s “uniqueness” remains.
“We are absolutely convinced that these numbers are doable,” Marchionne told analysts on a conference call, adding that profit margins could rise to at least 36% by 2022. They are at 30% now. “The house is firing on all cylinders, we are in a good place.”
Ferrari reported an 18% increase in 2017 adjusted earnings before interest, tax, depreciation and amortization (EBITDA) to 1.04 billion euros, which was in line with analysts’ expectations. The increase was helped by sales of its 12-cylinder models, including the GTC4Lusso and the 812 Superfast.
(Click Here for details about Ferrari doubling its production levels a year early.)
For 2018, Ferrari forecasts an adjusted EBITDA of at least 1.1 billion euros and shipments above 9,000 vehicles, up from 8,398 vehicles in 2017. That number is approaching the company’s max output, which Marchionne acknowledged.
He took a moment to assuage investor concerns about the coming SUV, which hasn’t been hailed by everyone as a positive. He said that any ute would need to exhibit “Ferrari style” for “the selected few” and its claim to fame would not be “being able to climb rocks.”
He echoed the exclusivity sentiment for any potential true all-electric powered supercar that may ever be produced. Marchionne hinted that it may be coming during last month’s North American International Auto Show in Detroit.
(To see more about Ferrari’s plans for an SUV, Click Here.)
“Whenever Ferrari does express itself in a fully electric vehicle, it will do so by making sure that both sound and handling are reflective of Ferrari’s heritage,” he said.