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Why Is Ferrari So Expensive?

Why Is Ferrari So Expensive?

When you look at a price tag of a Ferrari, a lot of people might raise their eyebrows and scratch their heads about why it is so expensive. There are some reasons behind it, let us discuss the same.

Limited Production

Making a car from the infancy stage is very expensive. It always starts with designing and sketching on a paper. We need to also prepare a blueprint of the same usually on the computer. Then after that, there is the creation of a physical prototype, typically from metal or fiberglass.

Then there is also research and development you have to do for which you have to bear the expenses as well. The huge expenses go into creating a powertrain, engine, and other parts of a car, driving tests on the road, crash, and safety tests.

Why Is Ferrari So Expensive?

Emissions and government certification. There are also some of the factory and workforce expenses. All of such can easily cost you hundreds and millions of dollars.

With the mass of market cars, the length of manufacturing and economies of scale come into the picture. For instance, there is the Toyota Corolla car model that has been on the market since 1966.

It happens often that the small changes from one generation of mass-market cars to the next. This means quite inexpensive.

If we talk about the volume of cars sold worldwide here is a look:

Ferrari F40

  1. Production started: 1987
  2. Production ended: 1992
  3. Total production: 1,315

Ferrari 348tb

  1. Production started: 1989
  2. Production ended: 1993
  3. Total production: 2,895

Ferrari 360 Spider

  1. Production started: 1999
  2. Production ended: 2004
  3. Total production: 7,500

Higher Cost of Materials and Manual Labour

Every component in a Ferrari, from the suspension system to the gear knob everything is entirely different. It is totally different from the same component in the mass-market car. The exotic interior leather, low profile tires, and carbon fiber parts. It can cost a lot of money.

In the mass market, the production of cars is almost automated and looks like a conveyor belt. If the car is a Ferrari it looks more like a set of production stations. This whole process requires more skilled and high paid workers.

There are a lot of videos available which manifest tours of Ferrari assembly and you can watch it for free. This can put you dumbstruck and astonished to see how much hard work is done through hands.

Marketing/branding costs

Apart from producing cars for regular roads, Ferrari also owns a racing team known as Scuderia Ferrari. The team is well known for its participation in Formula 1 championship, and it has also dug its hand into other races as well.

If you have a team of Ferrari is basically marketing, branding, PR, and R&D under the one roof. You cannot also deny the fact that to maintain a racing team is very expensive.

High demand

From year to year with the number of millionaires and billionaires growing steadily the demand for Ferrari is also mushrooming. Moreover, getting stronger day by day. Ferrari has decided to keep itself an exclusive manufacturer to keep the cap production at 7000 cars.

Nonetheless, the financial statement manifests that 2012 was the best year in Ferrari’s history up to that time. People are still willing to spend as much money to get a Ferrari of their dreams.

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