AcquiredFerrari: What happens when you staple a luxury brand to a sports team? (Audio)
EVERY SPOKEN WORD
150 min read · 30,067 words- 0:00 – 6:11
Beginning
- BGBen Gilbert
Okay, David, so the question, do you have a favorite Ferrari?
- DRDavid Rosenthal
Ooh, that's a tough one. I would never actually wanna get behind the wheel of it, but I think I gotta go with the F40.
- BGBen Gilbert
Of course.
- DRDavid Rosenthal
I remember just being like a kid in elementary school and getting a model of one and thinking like, "Oh my God, this is the most incredible machine that mankind has ever created."
- BGBen Gilbert
Yeah, it's the defining supercar.
- DRDavid Rosenthal
Yes, yes. How about you?
- BGBen Gilbert
I actually have two. One is the car from Charles Leclerc's wedding.
- DRDavid Rosenthal
Ooh.
- BGBen Gilbert
It's the 1957 250 Testarossa.
- DRDavid Rosenthal
Mm.
- BGBen Gilbert
And the car from Ford v Ferrari, that 1966 330 P3 is just beautiful. It's got these curves. It looks like a spaceship. It's gorgeous.
- DRDavid Rosenthal
Ah. Beauty and power, the story of Ferrari.
- BGBen Gilbert
Yes. All right. Should we do it?
- DRDavid Rosenthal
Let's do it.
- SPSpeaker
Who got the truth? Is it you? Is it you? Is it you? Who got the truth now? Hm. Is it you? Is it you? Is it you? Sit me down. Say it straight. Another story on the way. Who got the truth?
- BGBen Gilbert
Welcome to the Spring 2026 season of Acquired, the podcast about great companies and the stories and playbooks behind them. I'm Ben Gilbert.
- DRDavid Rosenthal
I'm David Rosenthal.
- BGBen Gilbert
And we are your hosts. Almost everyone needs transportation. It is a giant market serving a huge human need, and it is one of the top three things that households spend money on, along with their housing and their food. And the automobile has become the default way that humans move around the world.
- DRDavid Rosenthal
And that is not what we're talking about today.
- BGBen Gilbert
[laughs] And this episode has absolutely nothing to do with any of that. Today's episode, listeners, is about selling dreams.
- DRDavid Rosenthal
Ooh, yes.
- BGBen Gilbert
We are talking about Ferrari, one of the most paradoxical companies that we have ever studied here on Acquired. Ferrari ships very, very few cars, around 14,000 per year. That is approximately the number of Toyotas that are sold every 10 hours.
- DRDavid Rosenthal
[laughs]
- BGBen Gilbert
But of course, we know Toyota and Ferrari are a silly comparison, so what about a company that we have covered in the past? Porsche.
- DRDavid Rosenthal
Yeah.
- BGBen Gilbert
Even Porsche ships 22 times the number of cars that Ferrari does. And yet, even though almost nobody owns a Ferrari, only about 180,000 people globally, they have among the highest brand recognition. I would argue that over a billion people know what a Ferrari is.
- DRDavid Rosenthal
Easily.
- BGBen Gilbert
Which means, David, that Ferrari has the highest ratio of people who know about their products to people who actually own their products of any company in human history.
- DRDavid Rosenthal
[laughs] Uh, I, I think we gotta scope it to companies that make products that are nominally available for purchase by consumers, but-
- BGBen Gilbert
Yes.
- 6:11 – 12:39
Enzo Ferrari's Early Life & Tragedies (1898-1919)
- DRDavid Rosenthal
Ooh, all right. Well, we start in 1898 in the medieval Italian town of Modena with the birth of our hero, Enzo Anselmo Giuseppe Maria Ferrari, better known, of course, either by the name of the company he would found that bears his last name, Ferrari, or to his hundreds of millions of fans around the world simply as Enzo. So Enzo is born here in 1898 in Modena, the second of two sons, and his mother, Adalgisa, is a beautiful young woman, and his father, Alfredo, is 12 years older than his mother. And his father runs a successful metalworking shop and is kind of like a, you know, fairly well-to-do middle class entrepreneur about town. And Enzo and his father are, are often at odds growing up, but, uh, part of his dad does rub off on him in this sort of entrepreneurial influence. His dad, uh, says something to him which sticks with Enzo for the rest of his life, "A company is perfect when the number of partners in it is odd and less than three." [laughs] I.E. don't take on partners.
- BGBen Gilbert
Oh.
- DRDavid Rosenthal
Always be self-sufficient. [laughs]
- BGBen Gilbert
That's a great quote.
- DRDavid Rosenthal
We should say that much of this history, this whole episode comes from the fantastic really definitive biography of Enzo called Enzo Ferrari, written by Luca Dal Monte, who worked at Ferrari and Maserati for many years and then after he retired, dedicated about a decade of his life to researching and writing this definitive biography. It's really excellent. So anyway, his mother and his father are always fighting, they're always yelling, arguing, swearing, and this has a very different effect on each of their two children. For Enzo's older brother, who is named after his father, he's also named Alfredo, nicknamed Dino to tell them apart, he, Dino, becomes like the golden child. He's the peacemaker, the pleaser, the striver, the smart and successful one. He's gonna make his parents proud and he's gonna take over the family business. Enzo, on the other hand, as the younger brother, he just takes right after all the sort of less savory parts of mom and dad. He's mischievous, he doesn't apply himself in school or pay any attention, and, you know, why should he? His family's got money for the place and time. His older brother, Dino, the golden child, you know, is gonna make them proud. He's gonna take over the family business. Enzo can just kinda knock about town. He dreams of someday maybe becoming a journalist or a opera singer, mostly so that he can, you know, hang out with the showgirls.
- BGBen Gilbert
Oh, what could have been, a very different Enzo Ferrari.
- DRDavid Rosenthal
Ah, well, his life is an opera, as we shall see. So there's one thing, though, that really captivates Enzo's spirit, which is the new modern sporting and leisure pursuit of automobile racing. And one blissful night when Enzo is a teenager, he declares to his best friend his true intention in life, "I am going to be a racing driver." And that dream does indeed come true, but probably not in any way that Enzo expected-
- BGBen Gilbert
[laughs]
- DRDavid Rosenthal
... that night, because very shortly thereafter, World War I breaks out and two tragedies happen to Enzo in quick succession. First, his father, Alfredo, contracts pneumonia and dies, unrelated to the war, he just got pneumonia and, and suddenly died. Shortly thereafter, his older brother, Dino, the golden child, goes off, enlists in the Italian army, where he also contracts pneumonia and dies. So Enzo is left alone with his mother that he needs to support. The family business is gone, and because Enzo has never applied himself, he has no discernible skills or ability to continue it or, you know, really do much else that would, uh, provide gainful employment for him here. That was supposed to be Dino's role in the family. Now, before Enzo can stop to really think, he too gets drafted into the army, where he also comes down with pneumonia and nearly dies, but he survives. He's the one who survives.
- BGBen Gilbert
Oof. He has a quote later in life where he sort of acknowledged this emotional burden and his life's work that he would go on to create, where he said, "I feel alone after a life crowded by so many events and almost guilty of having survived."
- DRDavid Rosenthal
Yeah. I mean, the title of his memoirs is My Terrible Joys. [laughs] Tells you everything you need to know right there about Enzo's life.
- BGBen Gilbert
Yep.
- DRDavid Rosenthal
So when he comes back home to Modena at the end of the war, he has no hope, but he does still have his dream of motor racing. And remember, he's still like a teenager basically at this point, a late teenager, early 20-something. He starts making noise to his mom about selling the family house to finance buying a racing car, and that he's gonna go out and race this car and win prize money to support them. [laughs]
- BGBen Gilbert
It's an audacious plan.
- DRDavid Rosenthal
It's an audacious plan. His mom is like, "Uh, no." [laughs]
- BGBen Gilbert
[laughs]
- DRDavid Rosenthal
"How about instead, how about this? Why don't you go try to get a job at a car company and see where things go from there?" Enzo's like, "Okay, okay, fair compromise." So his mom arranges for him to travel to Turin, big city in the northeast of Italy, where he interviews for a job at Fiat. And Fiat is the biggest Italian car company at the time, and will come back up many, many times in this story. It is, as you all probably know, uh, essentially the Ford Motor Company of Italy, and the family behind it, the Agnelis, are the wealthiest and most important industrialists basically in the history of Italy. And today they own and control both Stellantis, which is the merged result of Fiat, Chrysler, and Peugeot, and they also own and control Ferrari. Don't worry, we'll get there.
- BGBen Gilbert
We'll get there, but n- not for, I mean, the better part of a century here.
- DRDavid Rosenthal
Yes, yes. So back to Enzo here in 1918. Fiat, of course, rejects his job application because, again, he has no discernible skills, but Enzo is persistent, and in 1919 he lands a job at a new startup automobile company called CMN, and there-He pledges his future salary, like the next several months of his salary, to purchase for himself one of the company's sports cars that he then goes off and takes racing. [laughs] So he didn't have to sell his house to finance this dream, but he did pledge his future salary.
- 12:39 – 25:08
Scuderia Ferrari: Enzo's Racing Dream (1920-1933)
- DRDavid Rosenthal
Now, this is an important point to land here. With very few exceptions, one of which we'll talk about in just a minute, motor racing at this point in time was a private individual sport. Drivers generally bought and raced their own cars, either because they were independently wealthy and successful and could afford their own staffs and mechanics to maintain these cars. These were folks known as gentleman racers.
- BGBen Gilbert
That's right. I've heard that term.
- DRDavid Rosenthal
Yes. And, and this is the group of people that ultimately, once Ferrari gets founded, become Enzo's core client base. Or the other group of drivers at this time are like Enzo. They're these kinda like hustlers and dreamers who manage to glom on somewhere in the car industry and leverage that into entering races. But basically motorsport was this like passionate sort of privateer pursuit.
- BGBen Gilbert
Not organized professional racers on highly paid teams.
- DRDavid Rosenthal
Yes. So Enzo enters into this world, and he does pretty well, well enough not only to send some prize money back home to mom, but also to attract the attention of Alfa Romeo, which is Italy's other large car company at the time, although much, much smaller than Fiat, and Alfa has one of Italy and Europe's few, if not only, in-house racing teams. So even though most racing that is happening is privateers, Alfa has their own racing team, which is pretty unique for Europe at the time. So they scoop up this young, hotshot, talented driver, Enzo, to come and race for them. And now this is a huge coup for Enzo. Like, basically his whole dream as a teenager is coming true. He's racing. He's making money from prizes. He's part of this Alfa Romeo team that's gonna support him, provide him great vehicles to race, and also mechanics and everything he needs. So he hatches a plan that he's gonna cash in on this newfound fame and notoriety by starting his own business. He's gonna be an entrepreneur, just like his dad. So at age 22, in 1920, Enzo starts his first company, a coachbuilding business in Modena called Carrozzeria Emilia. Now, what is a coachbuilding business? [laughs] This is another really important point to understand about the car business at this point in time. For most companies, and especially car companies that were making sports cars, the actual bodies or the coaches were built and designed by third-party coachbuilders. The cars were just an engine and a chassis that the car maker would deliver.
- BGBen Gilbert
Hmm.
- DRDavid Rosenthal
And then the clients would go to a coachmaker, like this one that Enzo is starting up, and have them build the body to their taste and specifications that would go on top of, you know, the mechanics of the car.
- BGBen Gilbert
Yeah. It reminds me of our Rolex episode, where the movement makers were totally different than-
- DRDavid Rosenthal
Yes, yes
- BGBen Gilbert
... the case makers, which were totally different than the jewelry stores that sold them, not the sort of integrated way that we know it today of the movement maker is often the same as the case maker, and then you often just sell sort of pseudo-directly.
- DRDavid Rosenthal
Yes, totally. In this case, it's actually a holdover from the horse-drawn carriage days, where the coachbuilders built carriages, but they obviously didn't supply the horses, so [laughs] yeah. So the same thing starts to emerge here in the early automobile industry. So Enzo's admittedly pretty half-baked plan here is that thanks to his sure-to-come, you know, new fame and fortune as an Alfa Romeo race car driver, customers, Alfa Romeo customers, and customers of other car companies, are gonna come banging down his door to build their car bodies, to build their coaches. What the connection is between being a good race car driver and being a great coachbuilder, I'm not sure, and, uh, neither is the market [laughs] because the business does not go well. It's a failure, and within two years, Enzo is bankrupt. Now, perhaps relatedly, Enzo's sorta mettle as a professional race car driver also proves to be good, but he's not great. He has all the talent, all the skill, but he comes to realize he doesn't have the one final thing that separates the true motorsport champions from everyone else. He's too afraid to die. He can't push himself and the car to the point that's really, really, really on the edge.
- BGBen Gilbert
The limit, as they say.
- DRDavid Rosenthal
The limit, yes. Part of this, of course, is his sorta haunted past. You know, the deaths of his brother and father. Death has had this huge presence in his life. But also, it's very much his present. So once he joins the Alfa Romeo team, there's two sorta senior drivers on the team who really take him under his wing as mentors, and they become friends, and Enzo watches them both die during races at the wheel, the first of which, Enzo was the first person to find him, and he actually literally died in Enzo's arms.
- BGBen Gilbert
Oof.
- DRDavid Rosenthal
And so after all these experiences, Enzo just, he can't push himself to do the same thing over and over like they did.
- BGBen Gilbert
And that is the sick reality of racing, at least in this point in history, is it is the people who are absolutely willing to go right up to that line and, and maybe cross it.
- DRDavid Rosenthal
Yeah, often cross it.
- BGBen Gilbert
I mean, it kinda depends where you put the line. Those who win are the ones who are absolutely willing to die.
- DRDavid Rosenthal
I mean, on our Formula 1 episode, we talked about through the '70s, right, there was an average of more than one death a year in-
- BGBen Gilbert
Yep
- DRDavid Rosenthal
... Formula 1 out of a field of only, like, 20 drivers. So yeah, that's the reality for a very long time in this business. And paradoxically, that's also part of the appeal. So in 1924, Enzo makes the decision to quit racing, cast off the coachbuilding business, and instead open a Alfa Romeo dealership.In Modena.
- BGBen Gilbert
Oh, I didn't know this.
- DRDavid Rosenthal
Yeah. He's now married. He wants to have a family. His son, naturally named Dino, would be born a few years later. Dino after his father and brother. Basically, he's going down the time-honored path of retired ex-athlete with some degree of notoriety opens local car dealership. [laughs]
- BGBen Gilbert
[laughs] Pioneering.
- DRDavid Rosenthal
Pioneering. Now, toward the end of his racing career, Enzo had also gotten more involved in the actual management of the team and gotten to know some of the managers of Alfa Romeo, the company itself, so he still has these close connections to the company, which are certainly gonna help him in becoming a dealer. And then the very next year, the Alfa Romeo board of directors makes the inexplicable decision to drastically cut back on their racing activities, and they're gonna keep the company team, but only gonna enter a few races, and the budget is gonna be cut. And so Enzo's like, "Whoa, whoa, whoa, whoa, whoa, whoa, whoa, whoa. [laughs] Hang on a sec here. I need the publicity from the Alfa Romeo racing team. That's my only, like, connection to fame here and why people would come to my dealership and buy my cars. Uh, I, I kinda need to have Alfas racing on a regular basis." So he goes to Alfa Romeo headquarters in Milan with a proposal. "I understand that you wanna cut the expense, you know, sort of day to day of running your own racing team. What if I take it over? And all the races that you don't wanna run, you bless me, your dealer, Enzo Ferrari, as the official racing agent of Alfa Romeo, and I'll put together my own private team. I'll hire the drivers. I'll hire the mechanics. I'll cover the costs."
- BGBen Gilbert
Right. It's like a fully outsourced racing team that's just kind of a contract relationship. You don't have to have this on your books. This is a sort of loose affiliation.
- DRDavid Rosenthal
And for Enzo, what better marketing activity could you imagine than to become the quasi-official racing agent, sorta second team of Alfa Romeo?
- BGBen Gilbert
Yep.
- DRDavid Rosenthal
And thus, the first iteration of the Ferrari business is born, the Scuderia Ferrari, which is the name that he gives to his new racing team, Scuderia being stables in Italy. It's a stable of drivers and cars for Alfa Romeo. And the Ferrari racing team to this very day in Formula 1 and elsewhere is the Scuderia Ferrari. That is the SF that you see on the Ferrari shield everywhere.
- BGBen Gilbert
Yep, and for a team that would go on to adopt the prancing horse, I, I am loving the thick metaphor here with the stable and the-
- 25:08 – 35:41
The Prancing Horse & Ferrari's Branding
- BGBen Gilbert
David, so where does the famous, infamous prancing horse for Scuderia Ferrari come from?
- DRDavid Rosenthal
Yeah. How did all those Ferraris come to have a black prancing horse on them?
- BGBen Gilbert
And I gotta say, it is the strangest thing looking at some of these old pictures because the first thing that the prancing horse went on was these Alpha Romeo cars.
- DRDavid Rosenthal
Yes, yes.
- BGBen Gilbert
And so there's these old pictures of a Alpha Romeo badged car, in the fender sort of in front of the door, there's a Scuderia Ferrari prancing horse.
- DRDavid Rosenthal
Yes. It's bizarre to look at today.
- BGBen Gilbert
Yeah. Listeners, we'll, we'll send that out in the email.
- DRDavid Rosenthal
So back when Enzo was a promising young racing driver, one of his early fans and supporters was a noble Italian count and countess, whose son Francesco Baracca, had been Italy's number one ace fighter pilot during World War I, like World War I dog fighting, and Baracca had won 34 aerial victories before he was tragically killed in combat right before the end of the war.
- BGBen Gilbert
Mm.
- DRDavid Rosenthal
And on his airplane, he had painted as his symbol and a good luck charm, the black prancing horse. Now he's like a national hero, and everybody in Italy knows about Count Baracca and his exploits during World War I, and his parents are fans of Enzo. And so one night after the war, the countess tells Enzo, "Why don't you paint the black horse on your car? It will bring you luck." And to symbolize this gift, she gives Enzo a photo of her son in front of his plane before he was killed with the horse and with an inscription from her below it that Enzo should use this symbol.
- BGBen Gilbert
That's a official endorsement right there.
- DRDavid Rosenthal
Yeah, absolutely. Oh, absolutely. So here we are now. Enzo is launching his, his Scuderia, his stables, you know, his horses, and he knows that this is the moment to put the gift to use as the Scuderia's logo. It's perfect, stable, horses, but it's more than that. This man had been a national hero. Everybody in Italy knows him and knows the symbol, and Enzo has had it bestowed upon him, not just with, you know, his mother's blessing, but with the explicit direction to put it on his race cars.
- BGBen Gilbert
[laughs]
- DRDavid Rosenthal
So Enzo takes the prancing horse, he places it within a yellow shield, yellow being the city color of Modena, with the three colors of the Italian flag above. This is just a genius marketing move. The prancing horse reflects both the Scuderia and links Enzo and the team to this national hero. The shield reflects his intention to do battle on the racetrack, and the Italian colors reflect the ultimate ambition to establish this team, this company and its future cars as the Italian national team and sports car company.
- BGBen Gilbert
Yep.
- DRDavid Rosenthal
So in our research, I spoke to Luca di Montezemolo, the legendary Ferrari chairman who would ultimately succeed Enzo, and really in many ways be his heir, as we will tell in this story.
- BGBen Gilbert
Important to note, different Luca than the Luca who wrote the book, David-
- DRDavid Rosenthal
Yes, yes
- BGBen Gilbert
... that most of this narrative is based on.
- DRDavid Rosenthal
Yes. And I asked Montezemolo, you know, you knew Enzo probably as deeply and as well as just about anybody who's still alive today, and there's this kind of popular legend that Enzo was just a racer. He only wanted to race. He didn't really care about business or road cars, and the, all the road cars only existed to fund his racing activities.
- BGBen Gilbert
Oh, this is the biggest thing about people today. When I say, "Oh, we're doing an episode on Ferrari," they say, "Oh my gosh. Yeah, it's such a crazy story 'cause, you know, Enzo really just wanted to race cars and he built this car company, but really that was just sort of to finance the racing, and he doesn't even care about those road cars. He's not really a business guy. He just wants to make great cars with great engines and, and send them racing."
- DRDavid Rosenthal
Completely false. [laughs]
- BGBen Gilbert
[laughs]
- DRDavid Rosenthal
Montezemolo confirmed when I asked him. Enzo was a natural born entrepreneur and marketer. He, he really was Italy's Steve Jobs in every aspect. I mean, think about it. What was Steve Jobs? Steve Jobs was, was not an engineer. He was a marketer, the same as Enzo. Enzo is not an engineer. He's not a car mechanic. He can't build the cars himself.
- BGBen Gilbert
But they both had a sort of understanding and deep appreciation for the technical things that enabled their visions to be possible.
- DRDavid Rosenthal
Yes. Enzo would say about himself when asked that, you know, he's not an engineer, he's not a car designer, he's no longer a driver even though he runs this team. He is, quote, "An agitator of men."
- BGBen Gilbert
[laughs]
- DRDavid Rosenthal
And that perfectly described Enzo, and I think, you know, perfectly describes Steve Jobs too.
- BGBen Gilbert
Yep.
- DRDavid Rosenthal
So if you think about it, what is Enzo doing here with the brand that he's building? There's the prancing horse, and then what's the other famous, you know, visual symbol associated with Ferrari? The red.
- 35:41 – 51:31
First Ferrari Road Cars & Le Mans Victory (1947-1949)
- DRDavid Rosenthal
So in 1943, he decides that he's gonna move all of his operations out to a small little town in the countryside to avoid the bombing. He's gonna go about 15 kilometers south of Modena to Maranello, and that's why Ferrari, to this very day, is in the small little, you know, hamlet of Maranello, not in the bigger city of Modena.
- BGBen Gilbert
Yep.
- DRDavid Rosenthal
So even despite the move to Maranello, the factory does get bombed twice during the last days of the war. After the war, that leaves Enzo kinda at a crossroads. The factory's not quite in ruins, but it's in, you know, they've been bombed twice.
- BGBen Gilbert
Disarray.
- DRDavid Rosenthal
Disarray.
- BGBen Gilbert
Significant disarray.
- DRDavid Rosenthal
Yeah, disarray. And he's just spent the last four or five years building machine tools and gotten pretty good at it.
- BGBen Gilbert
Yep.
- DRDavid Rosenthal
And then Enzo gets a visit from an old racing pal, an Italian, but one who spent the war not in Europe, but in exile in America, Luigi Chinetti, the man who brings Ferrari to America. So Luigi and Enzo met way back when Enzo joined the Alfa Romeo racing team as a driver, and Luigi was a mechanic on the team, who also then became a driver, and he ends up in New York. And when the war is over, Luigi goes back to Italy to visit Enzo, and he tells him about America. So this is a quote here from Brock Yates' biography of Enzo. Brock Yates was the longtime editor of Car and Driver magazine.Canetti described the miracle that was America, the aggressiveness of its people, their childlike inquisitiveness, and their bourgeois credulities. Yet there was a rich upper class whose taste were European. He had seen them, met them, gained their trust as he kept their aging European automobiles operating through the war years. He knew they would pay a king's ransom for Enzo's elite machines, and he, Luigi Canetti, meant to exploit that naive colonial lust. [laughs]
- BGBen Gilbert
What writing.
- DRDavid Rosenthal
What writing. Enzo agrees. Now, legends would say later, and Luigi I think would probably perpetuate this himself, that Luigi is the one who convinced Enzo to abandon the machine tools business and focus only on cars again after World War II. That's false. [laughs] Enzo was planning to anyway. There's, there's no way that he really was gonna go into machine tools.
- BGBen Gilbert
I mean, by 1943 his non-compete is up.
- DRDavid Rosenthal
Yes.
- BGBen Gilbert
And he's allowed to use the name again.
- DRDavid Rosenthal
Yes.
- BGBen Gilbert
And so, you know, the clock's ticking.
- DRDavid Rosenthal
The clock's ticking. But it is true, Luigi definitely convinced Enzo about America.
- BGBen Gilbert
Mm.
- DRDavid Rosenthal
And America was critical for Ferrari.
- BGBen Gilbert
And you know what wealthy Americans are extremely interested in when they're considering if they're gonna buy a extremely expensive, rare automobile? They love that cold shoulder of a artist creating the car mysteriously in some small town in Italy, who's just interested in racing. He's not interested in mass market cars. You're just lucky to get one of these racing cars, and he couldn't even care less about you.
- DRDavid Rosenthal
Oh, yeah. Oh, yeah.
- BGBen Gilbert
That sells cars.
- DRDavid Rosenthal
And boy, does Enzo know it.
- BGBen Gilbert
Yeah, he totally leans into this. This is, like, part of the perpetrating of the myth. This is why everybody believes, oh, he wasn't really a businessman, he just wanted to race cars.
- DRDavid Rosenthal
Yeah, I mean, oh, he- the, the whole persona of Enzo Ferrari, you know, the dark sunglasses.
- BGBen Gilbert
Oh, yeah. What's the tidbit you got on the sunglasses?
- DRDavid Rosenthal
It was an act. You know, he would wear the sunglasses in public, and at, you know, press interviews, and in meetings with clients or whomever, and then everybody else would leave the room, and he'd just take them off and put them on the table. [laughs] He didn't wear sunglasses all the time, only when crafting his image. But, uh, yeah, he leaned into it.
- BGBen Gilbert
Yep.
- DRDavid Rosenthal
So one way or another, machine tool business is out the window, and Enzo is back in cars. 1947 is the first year that they get going with the newly renamed Auto Construzioni Ferrari, now that he can use the Ferrari name.
- BGBen Gilbert
Mm.
- 51:31 – 1:14:03
F1 & The Tragedies of Enzo's Life (1950s)
- DRDavid Rosenthal
But of course they are. [laughs] Participating in the pinnacle of motorsport, as we've just been talking about, is integral to what Ferrari is. And if you buy a Ferrari as a client, what you are buying is a direct connection to that ongoing heritage in a way that you are not with any other auto manufacturer.
- BGBen Gilbert
At least not at this point in history, in 1950. There have been many others who have tried that strategy since, obviously less successfully than Ferrari, and we'll talk about why. But yes, this is the Ferrari formula that they uniquely execute well on.
- DRDavid Rosenthal
Yep. So as we continue the operatic life of Enzo Ferrari here, the re-entry into the racing business and the new pinnacle of motorsport in Formula 1 unfortunately comes with renewed tragedy. Enzo would hire the young Alberto Ascari, who is the son of one of his two mentors who died when Enzo was racing for Alfa Romeo, and Enzo would take Alberto under his wing, treat him almost like a surrogate son, until in 1955, Alberto is killed practicing in a Ferrari at Monza at exactly the same age that his father died. And Enzo vows that he will never become emotionally close to a driver again. He's witnessed too many deaths in his life. But unfortunately for Enzo, death during this time was only just beginning to reenter his life and his company.
- BGBen Gilbert
And the next death is really the one that kinda defines the rest of his life going forward.
- DRDavid Rosenthal
Yes. But before we continue this beautiful tragedy of Enzo Ferrari and his company-
- BGBen Gilbert
Now is a great time to tell you about one of our favorite companies, Vercel. Vercel is building the defining developer infrastructure platform for the agentic era. And importantly, just like Ferrari, the crucial part is that every part of the system is engineered to work together at the highest possible level. It's all about performance. And they're not just a deployment platform or just a framework builder or just an AI cloud anymore. They've become the agentic infrastructure company.
- DRDavid Rosenthal
And that title actually carries real meaning. It's infrastructure built for agents, where they are first-class users of the platform alongside human developers. It's also optimized for human developers who integrate agents into their workflows. And most importantly, it's infrastructure that acts with agency. So zero config deploys, automatic scaling, self-optimizing performance. The platform handles itself. Self-driving infrastructure, as, uh, they like to call it.
- BGBen Gilbert
Yes, which makes sense when you look at what's already running on Vercel. OpenAI, Polymarket, Stripe. Vercel built the modern platform for the web, which puts them in a really strong position for the agentic web.
- DRDavid Rosenthal
Yep. Their AI gateway sandbox and AI SDK are trusted by everyone from solo founders to the largest global enterprises, and they just shipped something really exciting, Chat SDK, which lets you build agents across Slack, Teams, Google Chat, Discord, and more, all from a single code base. The AI SDK alone gets downloaded 10 million times a week, which is up from seven million times a week when we recorded our last episode on F1 last month.
- BGBen Gilbert
Vercel really is the one-stop shop for everything you need to build in the agentic era, tools, frameworks, infrastructure, the whole system engineered to work together. You can learn more at vercel.com/acquired. That's V-E-R-C-E-L.com/acquired, and just tell them that Ben and David sent you.
- DRDavid Rosenthal
All right, so here in the 1950s, the truly, truly beautiful and truly, truly tragic opera of Enzo and Ferrari continues. First, let's talk about the beauty, the Ferrari 250 series, which for some of youMeans a lot. For the rest of you, we're talking about the Ferris Bueller car. [laughs]
- BGBen Gilbert
[laughs]
- DRDavid Rosenthal
Undeniably one of the most beautiful automobiles ever manufactured.
- BGBen Gilbert
But David, did you know it is the Ferris Bueller car, but the car you see on screen is actually not a Ferrari.
- DRDavid Rosenthal
Yes, it's a replica, and Ferrari sued the replica maker after the movie, right?
- BGBen Gilbert
That's right. Believe it or not, it is essentially a retrofitted Ford.
- DRDavid Rosenthal
Yes. [laughs] Deeply ironic given what we are gonna talk about in a minute here.
- BGBen Gilbert
And then there's a second version of it that I think is even a less real drivable car that they used when it slid out the glass and fell down and smashed on the ground. So-
- DRDavid Rosenthal
Burst into flames
- BGBen Gilbert
... they did not wreck a real Ferrari. In fact, there is not even a real Ferrari in camera-
- DRDavid Rosenthal
[laughs]
- BGBen Gilbert
... in that entire movie, or at least in that shot.
- DRDavid Rosenthal
Yes. You don't need to worry. No 250s were actually harmed-
- BGBen Gilbert
[laughs]
- DRDavid Rosenthal
... in the making of Ferris Bueller's Day Off.
- BGBen Gilbert
Yep.
- DRDavid Rosenthal
So as we talked about, the first Ferrari that Enzo sold to clients was the 166, but less than 100 of them were ever made.
- BGBen Gilbert
Which must mean that there was demand for 101 because-
- DRDavid Rosenthal
[laughs]
- BGBen Gilbert
... there's the, the famous Enzo Ferrari quote that is the business strategy today, "Ferrari will always deliver one car less than the market demand."
- 1:14:03 – 1:21:24
Ford vs. Ferrari: The Le Mans Rivalry (1963-1966)
- DRDavid Rosenthal
Well, enter the Ford Motor Company and Ford v Ferrari.
- BGBen Gilbert
Yes. So listeners, most of this is from the book Go Like Hell, which is the book that Ford v Ferrari is based on.
- DRDavid Rosenthal
The movie, yep.
- BGBen Gilbert
So in 1963, Henry Ford II, which notably this is the grandson of Henry Ford I. There was Henry Ford, then Edsel, then Henry Ford II, and he's, he's looking to make his mark. I mean, he, at this point, it's third generation ownership. Ford is this great American company. There's a lot of people that are sort of throwing barbs saying, "Well, I mean, it was your grandfather, and then that was your father, but, like, how much of this is really you?" That's starting to kinda weigh on him. He decides that Ford needs to be in the racing business to change their image and stimulate sales for the new generation. Now, over in the racing land of Ferrari, they're on a hot streak. We've been talking about their production at this point in time, but they had just won Le Mans in 1958 and then all in a row, 1960, '61, '62-
- DRDavid Rosenthal
Mm
- BGBen Gilbert
... '63, '64, '65. So if you are interested in entering racing, either you gotta beat Ferrari or you gotta own Ferrari.
- DRDavid Rosenthal
Yeah.
- BGBen Gilbert
So The Deuce, as Henry Ford II was known. [laughs]
- DRDavid Rosenthal
What a great racing moniker, The Deuce.
- BGBen Gilbert
Right? Right? Oh, and Enzo's got some great ones, too.
- DRDavid Rosenthal
Yeah, I mean, ultimately in his older age, he becomes The Grand Old Man, but what was he before that?
- BGBen Gilbert
Il Commendatore. [laughs] And The Drake.
- DRDavid Rosenthal
Yes.
- BGBen Gilbert
He's, he's got some great ones. So The Deuce over in America gets word, weirdly through their German subsidiary, that a mysterious letter has arrived from the German Consulate in Milan that an internationally known Italian automobile factory was interested in selling.
- DRDavid Rosenthal
Hmm.
- BGBen Gilbert
S- so already you should k- kind of-
- DRDavid Rosenthal
All right, there's something going on here
- BGBen Gilbert
... be a little suspicious of how this information comes to Ford. B- but Ford is not. Ford just goes, "Oh, this is interesting. Let's try and figure out who's thinking about selling." Well, it doesn't take him long to figure out that it is Ferrari.
- DRDavid Rosenthal
It's Enzo.
- BGBen Gilbert
Yes. They begin sort of a process to try to buy it, and Ford at this point has basically no racing capability of its own. This is an entirely new muscle for them. So they make an offer to buy Ferrari. The asking price was originally 18 million, but somehow Ford manages to easily negotiate it down to 10 million. So again, a little mysterious, l- little suspicious. Like, maybe that was a little bit too easy.
- DRDavid Rosenthal
[laughs]
- BGBen Gilbert
The agreement that is drafted and hits Enzo's desk, I mean, think about what could've been. Th- this is the craziest pitch. There are two companies that are formed. One is called Ford Ferrari. It is 90% owned by Ford, and it would make road cars. There's a second called Ferrari Ford that's 90% owned by Ferrari. That's the racing team.
- DRDavid Rosenthal
The racing team, yep.
- BGBen Gilbert
So this document is on Enzo's desk. He digs into it, and he's looking through the fine print, and he kinda realizes, "If I want to go racing and Ford does not want to go racing, who decides?"
- DRDavid Rosenthal
[laughs]
- BGBen Gilbert
And of course, Ford says, "Well, we're, we're buying your company. We have the final say."
- DRDavid Rosenthal
Ultimately, I control the budget.
- BGBen Gilbert
Right. So Enzo, of course, hates this, and in dramatic fashion, he blows up the deal right at the finish line, all while the papers had been reporting, you know, the information leaked that the Americans were about to buy this Italian national treasure. Makes big headlines when the deal blows up. You can imagine why this is in Ferrari's public relations interest based on e- everything that we've been describing about their business strategy, of course. Then Henry Ford II is absolutely incensed, and he has this great quote. In May of 1963, he goes to his lieutenants and he says, "We will go to Le Mans and beat his ass."
- DRDavid Rosenthal
[laughs]
- BGBen Gilbert
"We're gonna race him."
- 1:21:24 – 1:29:10
Enzo Sells 50% to Fiat (1969)
- DRDavid Rosenthal
So once he comes down with the disease, he gets serious about actually selling the company. And he sniffs around, he talks to his old buddies at Alfa Romeo. They sort of work on a deal not to Enzo's liking. Really, at the end of the day, though, there's only one correct buyer for Ferrari, and it's Gianni Agnelli and the Fiat empire. So in 1969, Enzo strikes a deal with Gianni to sell 50% of Ferrari to Fiat immediately there in 1969 with a secret agreement that triggered upon Enzo's death, which again he thinks is imminent, Fiat will acquire another 40%, taking their stake to 90%, and 10% of the company will transfer to Piero. Once Enzo dies, his plan is to, as much as he can, legitimize Piero, give him the Ferrari name, and give him a 10% stake in the company so that the bloodline, to some extent, as much as it possibly can in that time and place, will continue. And part of the deal with Fiat, just like he wanted with Ford, is that, "Fiat, you can take control of the road car business, but I'm gonna retain final authority over racing. You know, I know that my end is near, and I wanna spend my last days on this earth doing what I love, which is running the racing team."
- BGBen Gilbert
The incredible irony was the end was nowhere near.
- DRDavid Rosenthal
Nowhere near. [laughs]
- BGBen Gilbert
And actually, th- the world would change enough between this moment and when he would eventually pass that Piero is able to take over as Piero Ferrari, son of Enzo.
- DRDavid Rosenthal
Yes. Yes, yes.
- BGBen Gilbert
So how many years was it between, uh, 1969 is when the 50% sale to Fiat, he doesn't pass away until-
- DRDavid Rosenthal
He lives another 20 years.
- BGBen Gilbert
Yes.
- DRDavid Rosenthal
Yeah, 19 years. Yeah.
- BGBen Gilbert
1988. Like, he lives until I was born-
- DRDavid Rosenthal
Yes
- BGBen Gilbert
... is, is where's the sort of the end of his life.
- DRDavid Rosenthal
Well, he lives to launch the F40, which is the last car that Enzo launches.
- BGBen Gilbert
So there are two really interesting things about this deal. One, Enzo started his career by applying for a job at Fiat-
- DRDavid Rosenthal
Yes
- BGBen Gilbert
... and was turned down. So that's a total full circle moment there. The other full circle moment is that Gianni Agnelli was one of the very first Ferrari customers-
- DRDavid Rosenthal
Yes
- BGBen Gilbert
... of their road cars. It's amazing. And when you look at the actual deal, this, this blew my mind, David. If you do the lira to US dollar exchange rate in 1969, they ended up selling half the company for a little under three and a half million dollars-
- DRDavid Rosenthal
Wow
- BGBen Gilbert
... valuing all of Ferrari at 6.8 million.
- DRDavid Rosenthal
Wow. Oh my goodness.
- BGBen Gilbert
Enzo really wanted to do this deal, and I think he determined at this point in history, I'm, I've not seen this written in a- anywhere, but I'm reading into this, you know, even Ford thought it was worth somewhere between 10 and 18 million earlier in the decade. Enzo basically had one bidder.
- DRDavid Rosenthal
Mm.
- BGBen Gilbert
And he thought, "I have no exit path other than this. This needs to land with Fiat, and whatever the price is, it is." And so I think Fiat basically got a steal on this because it needed to stay in Italy, and it needed to go to a strong, thriving car company.
- DRDavid Rosenthal
Car company, and, and family in the Agnellis.
- BGBen Gilbert
Yes.
- DRDavid Rosenthal
Interesting. Well, all of this just underscores the most critical point here. I think this is probably the moment in history where the false legend that Enzo only cared about racing and wasn't a real entrepreneur emerges from. 'Cause if you look at the fact pattern, it makes sense here. Like, he wanted to spend his last days racing. He did this not great deal with Fiat.
- BGBen Gilbert
Yeah.
- DRDavid Rosenthal
The only reason this happened is 'cause he truly thought he was about to die.
- BGBen Gilbert
Yep.
- 1:29:10 – 1:52:40
Luca di Montezemolo's Return to F1 Glory (1971-1976)
- BGBen Gilbert
so David, Luca di Montezemolo, at least the first act of Luca anyway.
- DRDavid Rosenthal
[laughs] Of Luca's story, yes. So in 1971, when Enzo gets back to the office in Maranello after his hospitalization, he tunes in to a fateful talk radio show where he discovers a young man who will bring a breath of fresh air into his life, Luca. So Montezemolo, to many of you listening, is already a living legend. I mean, as much as anyone in Ferrari history besides Enzo, Luca di Montezemolo is Ferrari. And as I mentioned, I was very lucky to get to speak with him for a few hours and research for this episode, and I also got to watch this great movie about him that has just been made. It's called Seeing Red. It's with Chris Harris, the Top Gear presenter.
- BGBen Gilbert
Yeah. How did you get that? 'Cause that's not out yet.
- DRDavid Rosenthal
Yeah, it's not distributed outside of Italy yet, but I got a link to watch it. It's directed and produced by Manish Pandey, who wrote and produced Senna, the Senna movie.
- BGBen Gilbert
Wow.
- DRDavid Rosenthal
It's really, really excellent. When it's available in whatever geography you live in, very, very, very much worth watching. So Luca was born in 1947, the same year that the modern Ferrari commenced operations.
- BGBen Gilbert
Very poetic.
- DRDavid Rosenthal
In Bologna in Italy, but he moved to Rome as a child, where his best friend growing up is Cristiano Ritazzi, who is the son of Susanna Agnelli, Gianni Agnelli's sister. So Luca grows up almost like a member of the Agnelli family.
- BGBen Gilbert
Hmm.
- DRDavid Rosenthal
His best friend is, you know, one of the Agnelli heirs. And Luca comes to develop a close relationship with Gianni, and he would say Gianni was like a combination of an older brother and a father for me. So in 1970, young Luca moves to New York City to go off to study international law at Columbia Law School. Around the same time, though, he's also pursuing another career as a rally car driver.
- BGBen Gilbert
Really?
- DRDavid Rosenthal
Like a rally car driver, right, yes, yes. I don't think I've ever seen a Ferrari rally car.
- BGBen Gilbert
I don't think these two things have ever intersected. These universes are about as far apart as you could possibly get.
- DRDavid Rosenthal
[laughs] Yeah. But this is how Luca starts in motorsport. And so that one fateful day in 1971, Luca the rally car driver is a guest on this popular call-in talk radio show, and an audience member calls in to basically accost Luca and chastise and criticize the entire motorsport industry. Kind of much like the Pope in 1957, starts just laying into Luca, this caller, talking about how motor racing is evil, it's dangerous, it's bad for the environment. Like, "This is a sport just for rich people. It has no value in society." And Luca, impassioned, rises to the occasion, and he gives this passionate defense of motor racing. He speaks eloquently, poetically. He shuts down this caller and really gives this incredible response. And who happens to be listening to the program but Enzo Ferrari.
- BGBen Gilbert
Unbelievable.
- DRDavid Rosenthal
You just can't make this stuff up. You really cannot make this up.
- BGBen Gilbert
And he's kind of this perfect person, 'cause if Enzo's gonna take a liking to him here, I don't know what you're about to say, but if he's kind of Enzo's guy, but he's also-A pseudo family member of the Agnelli family. It's kind of this perfect candidate pool of one.
- DRDavid Rosenthal
Yes. So Enzo calls up the radio station and he's like, "I gotta know who this kid is. I wanna get in touch with him."
- BGBen Gilbert
[laughs]
- DRDavid Rosenthal
"Who is this rally car driver?" And literally the quote, Luca told me that this is what Enzo told the radio station. Enzo said, "This boy has big balls." [laughs] "I wanna talk to him." [laughs]
- BGBen Gilbert
Wow.
- DRDavid Rosenthal
Uh. So Luca and Enzo meet, and Enzo says to him, "I like you. You know, you've got big balls." [laughs] "I've been away from my business for too long, and I need some help. What I really need, I need an assistant, but I need a spy who can go-"
- BGBen Gilbert
[laughs]
- DRDavid Rosenthal
"... throughout the organization and report back to me what is actually going on in my company." [laughs]
- BGBen Gilbert
Mm.
- DRDavid Rosenthal
You don't have to ask Luca twice here. He takes the opportunity and goes to work for Enzo as his assistant here in the early '70s. Now of course, at some point along the way here, Enzo also learns of Luca's connection to the Agnelli family-
- BGBen Gilbert
[laughs]
- DRDavid Rosenthal
... which only makes him even more attractive. He's like, "Ooh, now I can have a spy at Fiat and the Agnelli family too, so great." [laughs]
- BGBen Gilbert
Right.
- DRDavid Rosenthal
So the first thing that Enzo assigns him to do is go figure out what's going on with sales of the road car business. Like go spend some time with the distribution network, understand who the clients are, understand who the collectors are, who are the dealers. So Luca does. He comes back, he reports. It's not good, as you were alluding to, Ben. This is a pretty tough time for Ferrari here in the '70s. The oil crisis is underway. Any car with an engine size over two liters was taxed at a incremental 40% in Italy-
- 1:52:40 – 2:27:41
Ferrari's "Pepsi Challenge" and how Luca rescued the company (1991)
- DRDavid Rosenthal
It was Fiat. It was all they knew how to do. They came in of, like, "Oh, the, the way we can fix this is we increase production. We'll cut costs, so let's share some parts with Fiat-"
- BGBen Gilbert
Mm
- DRDavid Rosenthal
... "cars." You know, Ferrari road cars went from being the same thing, built by the same people as the racing cars, as the F1 cars and the Le Mans cars in the same factory to, in this period with Fiat control, they're really not the same thing. You know?
- BGBen Gilbert
Mm.
- DRDavid Rosenthal
These are... It's would be too far of a stretch to say they were repurposed Fiats, but they had lost that true connection to race machines.
- BGBen Gilbert
Mm.
- DRDavid Rosenthal
And so Luca comes back and says, "We gotta fix this." So a- at the time, the Japanese sports car industry was on the rise, and all the car enthusiasts were saying, "Ferrari's dead. The Italian car makers are dead. The Japanese have taken over." Luca has the test drivers at Ferrari go out and buy a Honda NSX and do, like, his own version of the Pepsi Challenge. Like, go out there-
- BGBen Gilbert
[laughs]
- DRDavid Rosenthal
... drive the NSX as hard as you can around the test track. Drive our cars. Drive the 348 as hard as you can around the test track. And they come back, and they're like, "Yeah, I mean, there's no competition. The NSX just blows us away."
- BGBen Gilbert
Wow.
- DRDavid Rosenthal
I mean, how sad is that? It's a Honda. A Honda.
- BGBen Gilbert
That's completely lost to history today. You don't hear anyone talking about... And it, it, Ferrari's this sort of, like, untouchable, apex brand that it's hard to imagine that happening just, you know, as recently as the early '90s.
- DRDavid Rosenthal
Right. I mean, it's one thing if Lamborghini is beating them. I mean, that's bad. That's really bad. But if Honda is making a better sports car than Ferrari, there's a real, real problem.
- BGBen Gilbert
Yep.
- DRDavid Rosenthal
So how's Luca gonna turn this around? He comes up with three priorities: the team, the technology, and the myth.
- BGBen Gilbert
Mm.
- DRDavid Rosenthal
So number one, the team, the Formula 1 team. We have to fix the Formula 1 team. Going back to his great quote, you know, there's not a direct correlation between victories on the track and cars that you can sell, but the team feeds the myth. If you don't add wood to the fire of victories on the track, the flame of the myth will die. You cannot only lose.
- BGBen Gilbert
Yep.
- DRDavid Rosenthal
So the team hadn't won a championship since 1979. Luca goes out and recruits the dream team, like, the greatest set of F1 team members that had ever existed in history. Jean Todt, team principal. Ross Brawn, race engineer. Michael Schumacher, Ferrari number one driver. And it takes a couple years for Luca and the team to turn this around, but this is just absolute domination that they unleash on the field.
- BGBen Gilbert
By the end of the decade, there would be five straight years, 2000 to 2004, where Michael Schumacher won every single Drivers' Championship five years in a row, and Ferrari won every single Constructors' Championship five years in a row.
- DRDavid Rosenthal
As we talked about on the F1 episode, it, it was a problem for Formula 1. The sport became too boring because Ferrari always won.
- BGBen Gilbert
Yep.
- DRDavid Rosenthal
In total, under Montezemolo's tenure, Ferrari wins 19 Drivers' and Constructors' Championships, which is more than Enzo.
- BGBen Gilbert
[laughs] That's amazing.
- DRDavid Rosenthal
It's incredible how he turned the team around, just like he did back as Enzo's assistant back in the day.
- BGBen Gilbert
All right. Then the technology.
- DRDavid Rosenthal
The technology, the cars. We can't have a Honda NSX outclassing a Ferrari. Ferraris are about our heritage and our myth, but they are also about looking ahead. We can't be selling 250s repainted for the modern era.
- BGBen Gilbert
Yeah. And this is really where the feelings about technology change, where Ferrari went from a late adopter of technology when it's sort of proven to really pushing the bleeding edge. And today, Ferrari spends a good amount more on R&D as a percentage of their revenue than most other car companies. It's become sort of a, a signature of the company.
- DRDavid Rosenthal
Yep, and this absolutely was a hallmark of Montezemolo's turnaround. Enzo didn't really care that much about technology. [laughs]
- BGBen Gilbert
That's interesting. Yeah.
- 2:27:41 – 2:48:24
Post-IPO Ferrari: New Models & Growth (2015-Present)
- DRDavid Rosenthal
They are forecasting a lot of debt reduction.
- BGBen Gilbert
[laughs]
- DRDavid Rosenthal
Some of that will come from cash flow.
- BGBen Gilbert
Okay.
- DRDavid Rosenthal
And some of that might come from other places.
- BGBen Gilbert
Mm.
- DRDavid Rosenthal
So Sergio needs, you know, a lot of cash to meet his promise to Wall Street and pay down the debt. Where's an easy place to find it? He's gonna IPO Ferrari and use the proceeds to help pay down the Fiat Chrysler debt. Now, we should note, through all of this, if you couldn't already foresee it, there was a huge conflict and power struggle brewing between Luca and Sergio. These two guys were both incredible auto company operators, but, like, cut from totally different cloths.
- BGBen Gilbert
Yeah.
- DRDavid Rosenthal
Luca is the ultimate car guy. He's a great businessman, and he's a great executor of the luxury strategy for Ferrari, but in his mind and his heart, the cars always have to come first. The great business decisions come out of the great car decisions. Sergio, on the other hand, is not a car guy. [laughs]
- BGBen Gilbert
[laughs]
- DRDavid Rosenthal
He came from a consumer products testing company. He is a financial engineer and an empire builder. And actually, the great tragedy to this act of Ferrari is it could have been a beautiful partnership-
- BGBen Gilbert
And was for a while
- DRDavid Rosenthal
... between the two of them. And was, truly was. They saved Fiat together. But ultimately, Luca and Sergio are not gonna be able to coexist and share power within the same structure. And for a while, Luca going back to just Ferrari-
- BGBen Gilbert
Makes it work
- DRDavid Rosenthal
... felt like it was, it w- it was the solution that made sense. His passion was Ferrari, his history was there. He could go back to running it and be very happy, and Sergio could leave it alone and continue running the Fiat empire. But once Sergio needs the cash to pay down the Chrysler debt and turns to Ferrari, they're on a collision course.
- BGBen Gilbert
Mm.
- DRDavid Rosenthal
Because IPO-ing Ferrari is, like, completely anathema to Luca's way of being. Becoming a public company means you gotta deliver consistent, predictable growth, which means hitting a drumbeat of shipping more cars, making more models, adding more clients, raising prices. It's not like Luca doesn't wanna do these things in a vacuum, but he wants to do these things very thoughtfully and over an extended period of time, not on a Wall Street calendar.
- BGBen Gilbert
And to have flexibility.
- DRDavid Rosenthal
Yes.
- BGBen Gilbert
Not opposed to any of those things, just the way that you and I aren't opposed to doing things with Acquired, but we don't wanna be locked in and committed. You want some organic-ness to how you run the business. You want the products to be these living, breathing things. You wanna be able to rapidly change your mind in the face of new market conditions.
- DRDavid Rosenthal
Yep. I mean, hell, one of Luca's very first actions when he came back to Ferrari after Enzo's death was to cut production by half.
- BGBen Gilbert
Right. [laughs] Right. Can you imagine doing that as a publicly traded company?
- DRDavid Rosenthal
Yeah, making, to announce to Wall Street like, "Oh, hey, we think the right thing to do next year is to cut our production by half. Hope you're with us."
- BGBen Gilbert
Now, interestingly, at first, yes, they're publicly traded, but don't they only float 10% of Fiat's 90%?
- DRDavid Rosenthal
Yeah. Well, so here's what happens. Thanks to the Chrysler acquisition, it's not an option not to pay down the debt. The company, Fiat, the empire, has to get the money, so the choice is kinda made for them. They have to side with Sergio.
- BGBen Gilbert
'Cause they have to go public, and he's kinda the guy to run it as a public company.
- DRDavid Rosenthal
I mean, taking Ferrari public is part of the plan of how this whole thing is gonna work.
- BGBen Gilbert
Yeah. Do you think Luca was not a public company CEO?
- DRDavid Rosenthal
I think Luca probably had zero interest in taking Ferrari public, and I think he had even less than zero interest in using proceeds from the Ferrari IPO and the other financial engineering that we're about to talk about to save Chrysler [laughs] and Fiat. Luca did not care about any of that.
- BGBen Gilbert
Whereas on the other side, Sergio is kind of exactly the guy you would want to manage the Street, to look for all the ways that the Ferrari business is, quote-unquote, "unoptimized," to realize the full value of the asset. He's, like, the sort of leader that investors salivate over.
- 2:48:24 – 3:07:16
The FUV Purosangue & Model Range
- DRDavid Rosenthal
one model that you didn't talk about is the FUV. [laughs]
- BGBen Gilbert
[laughs] Yes, and you are not, uh, speaking with a lisp there. That is, it is the Ferrari Utility Vehicle.
- DRDavid Rosenthal
The Purosangue, the pure blooded.
- BGBen Gilbert
Yes. So this is a delicious tidbit of Ferrari-ism. The market really wants an SUV. 60% of Porsches sold at this point are SUVs. They're expensive and beautiful soccer mom and soccer dad cars.
- DRDavid Rosenthal
Yep.
- BGBen Gilbert
And when you go upmarket from Porsche, even to Lamborghini, which looks a lot like Ferrari from a production volume standpoint, they only make 11,000 cars a year also.
- DRDavid Rosenthal
And importantly, is part of the VW, Volkswagen group-
- BGBen Gilbert
Yes
- DRDavid Rosenthal
... along with Audi.
- BGBen Gilbert
Yes. Astonishingly, over 60% of Lamborghinis now sold are their SUV.
- DRDavid Rosenthal
Yes.
- BGBen Gilbert
I mean, the classic idea of, like, guy driving a Lambo around the street, 60% of that brand's [laughs] cars are soccer mom and soccer-
- DRDavid Rosenthal
Yep
- BGBen Gilbert
... dad mobiles.
- DRDavid Rosenthal
It's the exact same thing that happened with Porsche. Porsche was the 911 company, and now they're the Cayenne and Macan company.
- BGBen Gilbert
If I ever get a distastefully large amount of crypto winnings, I'm gonna go buy a Lambo, but it's gonna be an Urus.
- DRDavid Rosenthal
[laughs]
- BGBen Gilbert
Just to... [laughs]
- DRDavid Rosenthal
Oh, no.
- BGBen Gilbert
Just for the irony. [laughs]
- DRDavid Rosenthal
[laughs] I hope in bright green.
- BGBen Gilbert
Yes, yes. Okay, so people really want one from Ferrari. So what does Ferrari do? They don't call it an SUV. They call it an FUV. They debut a low-top, four-door, almost SUV called the Purosangue, and as you mentioned, it translates to pure blood or thoroughbred, and it's almost as if they're saying, "Yes, this is still a Ferrari. In fact, we're, we're almost even overcompensating with the name and saying, 'We really insist it is as thoroughbred of a Ferrari as you could possibly own,' by naming it that."
- DRDavid Rosenthal
And it has a naturally aspirated V12 as its engine.
- BGBen Gilbert
Yep. I mean, it is, it's a, it's a real Ferrari under the hood.
- DRDavid Rosenthal
Yes.
- BGBen Gilbert
The really disciplined thing that they did, though, they capped total production at 20%. This ensures that when you see a Ferrari on the road, it will stay your classic idea of what a Ferrari is. It really protects the brand, and it sacrifices a lot of short-term profits. And I gotta say, I have immense reverence for the company for this sort of discipline.
- DRDavid Rosenthal
And it keeps this core pillar of Ferrari that just seeing one should be a special event. They are not gonna go sell 60,000 Purosangues. They're selling about 2,500 to 3,000 of them per year globally. You are not going to see one on the streets tomorrow or the day after that or the day after that.
- BGBen Gilbert
Yes. I saw one this week, David, at an event that we were at valet parked outside, and I thought, "Oh, I've actually never seen one of those before."
- DRDavid Rosenthal
Yeah.
- BGBen Gilbert
Which is exactly how it should be every time you see a Ferrari.
Episode duration: 3:59:19
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Transcript of episode JVO8roYiNXM
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