How Italian Ferrari could become an American company

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A couple of years ago, Lapo Elkann, the car-nut grandson of the late Fiat patriarch Gianni Agnelli, was outraged that Volkswagen had agreed to buy Ducati, the Italian motorcycle company best known for its lean, testosterone-laden road missiles. In a text message to me, he said, "Ducati has to stay Italian" (I had interviewed him not long before about other matters).

Elkann toyed with the idea of bidding for Ducati to keep its bloodline pure but couldn't compete with Europe's largest car maker. Ducati is now a brand within Volkswagen's Audi marque.

I wonder if Elkann fears that Ferrari is destined to become the next Italian motoring icon to hand its Italian credentials to the barbarians at the gate. If he does not, he should be, for Ferrari may be on the verge of becoming American. If you don't like the idea of a German Ducati, you might hate the idea of an American Ferrari.

Last week, the protector of the Ferrari brand, Luca Cordero di Montezemolo, Ferrari's long-time chairman, was pushed out by Sergio Marchionne, the CEO of both Fiat, which owns 90 per cent of Ferrari, and Chrysler. He is to be replaced by Marchionne himself. The management overhaul appears to leave Ferrari's Italian heritage intact. Indeed, Marchionne is Italian (and also has Canadian citizenship) and so is Fiat, which has been associated with Ferrari since the heyday of Enzo Ferrari in the late 1960s.

So where is the potential threat to Ferrari's Italian-ness?

It comes from two fronts. The first is an ownership structure that is about to change. Fiat is merging with Chrysler and the new entity, Fiat Chrysler Automobiles (FCA), is to list its shares on the New York Stock Exchange some time in the fall. That will make Ferrari, indirectly, an American-controlled company. Ferrari's ownership would become directly American if Ferrari were to seek its own initial public offering on the NYSE. It's an open secret that Fiat has contemplated a stock market listing for Ferrari.

Analysts have written about the idea and Marchionne himself has talked up Ferrari's potential value. In 2011, he dismissed reports that Ferrari might be valued at €5-billion ($7.1-billion) as a stock market player, insisting it would be worth double that figure. While Marchionne denies that plans are being made to roll Ferrari onto the stock market, there is no doubt he is dazzled by the cash torrent that such a deal could release.

The second threat comes from Marchionne himself, at least in my opinion. There is no doubt that Marchionne is one of the finest auto executives on the planet. He became CEO of Fiat in 2004 and spared it from almost certain oblivion. Five years later, he formed a partnership with Chrysler, then emerging from Chapter 11 bankruptcy, and later took full control of the Detroit banger. Chrysler has since come back from the dead, proving Marchionne's credentials as a turnaround artist par excellence.

But that's the point – he's a fix-it guy, not a brand builder and Ferrari is all about the brand.

No one buys a Ferrari because it reaches 100 km/h half a second faster than, say, a McLaren (it doesn't). No one buys a Ferrari because it's as comfortable at high speeds as a Porsche 911 (it's not). Ferraris are bought because they are red-blooded, fire-breathing stallions on wheels that look as good standing still as they do doubling the speed limit. They are bought because they share the DNA of the fabulous cars built by Enzo Ferrari himself. They are bought because they are part of the same stable as the Formula One cars that remain the most successful F1 team since the sport was invented. They are bought because they are Italian.

The brand is carefully nurtured. Under Montezemolo, who became Ferrari's boss in 1991 and launched beautiful beasts like the Enzo and the 458 Italia, the waiting list was kept at two years. Anything less and the brand would lose its exclusivity. Ferrari did so in part by keeping production low – about 7,000 cars a year are built. Note that you almost never see photos of the Ferrari production line in Maranello. That's because Ferrari is terrified of leaving the impression that its cars are mass-produced, like Ram trucks or Jeeps. It wants buyers to think they trickle off the line, lovingly caressed by craftsmen every centimetre of the way.

No one outside the upper ranks of Fiat and Ferrari knows why Montezemolo resigned when he did, but there is no doubt that Ferrari's six-year losing streak on the F1 circuit made both him and Marchionne exceedingly grumpy.

I, for one, don't buy the theory that the F1 losses sank Montezemolo's career. I suspect that he was resisting Marchionne's vision for Ferrari and finally lost the battle. It's possible that Marchionne sees Ferrari as a global company with far higher production volumes and an American stock market listing. Not an exclusive Italian sports car maker, in other words.

Last week, Montezemolo put his anxiety about Ferrari's future on plain display when he was quoted as saying, "I fear Ferrari will become like Lamborghini." At one point, Lamborghini was regarded as Ferrari's glamorous equal. Then it ran into financial trouble, handed the keys to Volkswagen and essentially lost its identity. Today, Lamborghinis are considered fine, though rather soulless, machines, their Italian DNA all but gone even if they are still produced in Italy.

The Ferrari brand is one of the most alluring brands in the automotive universe, perhaps the most alluring. Enzo Ferrari sold Ferraris as gorgeous racing machines. Montezemolo sold them as dreams.

Through an American stock market listing and ramped-up production, Marchionne may sell them as luxury products. To be sure, a Ferrari is a luxury product but it's one that is Italian right down to its thundering exhaust. If the Ferrari brand is to continue to thrive, the spirit of Enzo Ferrari has to be nurtured, not vanquished.

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