Ferrari CEO Louis Camilleri has retired unexpectedly following his battle with COVID-19.
Though 65, he wasn’t expected to leave the job in the short term, and his departure creates some immediate problems for the Italian luxury brand, which faces some serious challenges moving forward, including rising competition from both established and new challengers, the surge in global demand for SUVs, and the accelerating shift to electric propulsion, even in the exotic high-performance market.
“I’m proud of the company’s numerous achievements since 2018 and know that Ferrari’s best years are still to come,” Camilleri said in a statement announcing his retirement after heading Ferrari for just over two years.
Camilleri had to be hospitalized after contracting COVID-19 and initial reports from Italy pointed to the illness for his decision to leave. But the Reuters news service quoted an unnamed company source as saying that wasn’t the reason behind Camilleri’s departure. The executive himself simply cited personal reasons.
The Formula One website, meanwhile, reported that “ahead of the Abu Dhabi Grand Prix, (Camilleri) told the Italian company of his desire to retire from his role as CEO and as member of the board of directors.”
Separately, Camilleri also resigned from his dual role as non-employee chairman of Philip Morris International, where he had previously served as chairman and CEO. The company, best known for its Marlboro brand, has been a long-time backer of Ferrari’s popular and successful F1 racing team.
Camilleri came to Ferrari in July 2018 following the unexpected death of Sergio Marchionne, the automaker’s previous chief executive. In his primary role as CEO of Fiat Chrysler Automobiles, Marchionne had orchestrated the spin off of Ferrari in 2015.
With only a few short-term setbacks, Ferrari stock has had a rapid rise since its IPO and, on Wednesday, ahead of the news about Camilleri, stood at $213.93. It tumbled slightly after the announcement of his departure.
Though Camilleri was originally expected to remain with Ferrari to help ease the transition to a new chief, there has been speculation about succession, considering his age. Among those seen as high on the list, Stefano Domenicalli said through a spokesman that he intends to take over as the head of Formula One at the beginning of the year.
Nonetheless, John Elkann, the heir to the Fiat-founding Agnelli fortune and Ferrari Chairman, is expected to have plenty of options. Ferrari sales hit a record 10,131 last year, demand for products like the 488 Pista and 812 Superfast skyrocketing since Marchionne abandoned a strategy of artificially capping availability. The automaker’s name generates plenty of revenues from other licensed luxury goods, as well. The company has, however, slipped from its traditional leadership role in F1.
Finding a replacement “capable of managing Ferrari’s peculiar business model, facing at the same time Ferrari’s current issues in F1,” will be no easy task, wrote analyst Monica Bosio, an analyst with Intesa Sanpaolo.
Reviving Ferrari’s long-dominant role in Formula One could be the easy part, however, according to some who follow the marque.
The automotive world has been changing all around the company, even as its sales surged to last year’s record high. Even among exotic sports car fans, SUVs are becoming more and more popular. The Urus has quickly become the best-selling product for Lamborghini, another brand located in the shadows of Modena, Italy where most of Italy’s exotic automakers are based. And Britain’s Aston Martin expects the same will be the case with the new DBX model just now going on sale.
After years of resistance, Ferrari finally approved production of its own SUV, to be called the Puro Sang, shortly before Marchionne’s death. The company also said at the time that it would add a hybrid model. That surprised few, as it had used a version of the technology borrowed from F1 for its limited-run Enzo.
While hybrids will help boost performance, even while addressing the issue of fuel consumption, that won’t necessarily go far enough. More and more countries, such as Great Britain, are moving to ban or limit sales of vehicles using internal combustion engines. A number of cities, including London, Hamburg, Paris and Berlin, soon will bar vehicles from even entering unless they can operate in zero-emissions mode.
Under Camilleri, Ferrari authorized an all-electric model – but not until 2025, at the earliest. A year ago, Camilleri told an interviewer that battery power will become increasingly important to Ferrari. But the timetable leaves it vulnerable to the increasing number of competitors, both new and old, entering that space.
Indeed, Rimac, a Croatian startup, and Pininfarina, the design-house cum automaker, are delivering horsepower and torque numbers that dwarf what even the most powerful gas-powered Ferraris have ever managed. Tesla, with the new Roadster it is developing, promises to post 0-60 numbers under 2 seconds.
Performance is clearly part of the Ferrari formula, but there’s more to its cache, including its elegantly over-the-top designs and the legend behind its prancing pony logo.
Whoever succeeds Camilleri will have to protect those assets while also dealing with the many challenges the brand will face in the coming years.