Category Archives: Ferrari

Betting On A Red Horse

Ferrari 458 Speciale

Courtesy Ferrari N.A.

I’m not one to bet on horses. I never play the lotto (even with the record 10 figure jackpot currently in the headlines), and I have never even made it to a blackjack table in Vegas despite a few attempts. I didn’t even pay much attention to Williams Grand Prix, another stalwart of the Formula One (F1) circuit, when the company went public. But this time, it’s a little different. Ferrari is now a public company following a spin off from Fiat Chrysler (FCAU), and I have some shares of stock in the Prancing Horse.

The Legend

You might say I’m long on the legend of the Prancing Horse, which began with Enzo Ferrari (1898-1988) as a racing driver for Alfa Romeo in the early days of the automobile. Upon the birth of his son Alfredino (“Dino”), he retired from driving to concentrate on running Alfa’s F1 team, and then eventually setting up shop on his own.

In that bygone era of racing cars painted in national racing colors rather than adorned with sponsorship livery, road going Ferraris were sold to fund operations of the racing team. Ferrari has always been a company that sold cars to go racing, which is quite the opposite of most every manufacturer that has been involved with the sport before or since. It is also the one with the most wins and championships in F1, and the only one that has been part of the sport all through the post-WWII era, starting with the 1950 season.

Unsurprisingly in such a competitive business, the company’s fortunes ebbed and flowed over the years. Dino Ferrari, whom Enzo had likely been grooming to eventually takeover, tragically died of muscular dystrophy in 1956 at the age of 24. Then in the 1960s Ferrari almost sold the business to Ford but backed out. “The Deuce” (aka Henry Ford II) was incensed and commissioned the creation of the Ford GT40, which eventually ended Ferrari’s dominance of the famed 24 Hours of Le Mans endurance race, by winning four times straight beginning in 1966.

Fiat, under the leadership of Gianni Agnelli, bought a stake in the company in 1969 and later became the controlling shareholder. The company went on to some of its greatest successes after Enzo’s death in 1988, launching a slew of critically acclaimed and commercially successful models beginning in the 1990s and returning to its winning ways on the F1 circuit with a combined 14 driver and constructor titles between 1999 and 2008.

Green Pastures

Ferrari is a solid, if expensive investment. It is a trophy property after all. In the short term the share price is subject to fall due to the initial hype surrounding its IPO and the high Price/Earnings (P/E) ratio. However, over the long term I can’t think of many more solid investments in the “automotive” sector. Here’s why.
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A Piece of Ferrari

Ferrari California T convertible

Ferrari California T

A few weeks ago Fiat Chrysler Automobiles (FCA), majority owner of Ferrari, announced it would spin-off the fabled Italian marque next year by floating 10% of the shares on a stock exchange and distributing another 80% to its shareholders.

While details explaining exactly how FCA will go about doing so have yet to be announced, reports indicate that one would have to buy them on the market or be an existing shareholder. How I understood it is if you want to get your mitts on a piece of Ferrari you will probably do better to buy Fiat Chrysler shares than wait to buy Ferrari shares next year, even if it means having to buy convertible debt.

Why Is Fiat Chrysler Floating Ferrari?

Basically they are borrowing on Ferrari’s good name because FCA needs to raise some $60 billion to fund product development through 2018. Various estimates have pegged Ferrari’s value at around $7 billion while FCA’s entire market cap (including Ferrari) is only about $18 billion. No wonder FCA wants to spin off the Prancing Horse.

Ferrari is worth more standing on its own than under the Fiat Chrysler umbrella. So separating Ferrari will more accurately reflect the value of the brand, increasing the amount against which FCA can borrow for product development.

So early last week I bought some FCA shares (stock ticker FCAU) not only because I’m a Ferrari fan – which is a terrible reason to buy stock – but also because I think it’s a good long term investment (even if I don’t view FCA in the same light). Here’s why.

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Ferrari California Dreamin’

Ferrari California. Photo courtesy Ferrari

Ferrari California

Whether through foresight or serendipity, the introduction of the Ferrari California – the Prancing Horse’s least expensive model – at the 2008 Paris auto show coincided with the start of the Great Recession.

What better way for the exotic car maker to expand its business than to launch an entry level model when most people were losing (or worried about losing) their shirt? Actually, the target market was certainly more likely people who weren’t worried about said shirt loss, but perhaps may not have wanted to rub it (as much) into the faces of those who were.

So it was that more than 50 years after the original Italian sports car named after a U.S. state arrived on our shores, the 2009 model followed, value-priced and packed with Maranello’s latest technology. Whereas the Ferrari lineup had previously consisted of front engine V12 Gran Turismo (GT) and mid-engine V8 sports cars, with a flagship supercar thrown in every seven to 10 years (e.g. F40, F50, Enzo), the California was the first ever front engine V8 Ferrari.

Described as a retractable hardtop two seat GT with optional 2+2 seating – the rear two passengers usually preferring the seats of the front two – it became one of the company’s volume models.

V12 x 2/3 = Engine

At the heart of it lay a variant of the Ferrari F430 engine, an aluminum 4.3 liter V8. But this was the first Ferrari to have direct injection. Churning out 453 hp, it produced less power than the unit in the F430 but more torque on its way to a redline near 8,000 rpm.

Power was directed to a rear mounted dual-clutch semi-automatic transmission featuring seven speeds. This partly explains why only 46% of the car’s hefty 3,900 lb. mass rides on the front wheels. Later an optional six speed manual version became available. But rumor has it that pretty much none were sold, making it nearly as rare as unicorns.

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The Fabulously Fast Ferrari 599GTB Fiorano

 

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Throughout its long history Ferrari’s mission has largely been to win races, and then apply its technical expertise to building exotic sports cars for well-heeled clientele. Each car was a statement about Ferrari’s capability at the time.

The company made another emphatic statement at the 2006 Geneva Motor Show with the premiere of its flagship model, the 599GTB Fiorano. The front engine V12 sports car was intended to do nothing less than advance the state of the art in a manner that was unmistakably Ferrari.

Drawing on its lineage of classic front-engine V12 Ferrari Gran Turismos of the 1960s as well as its immediate predecessors, the 550 Maranello and 575M V12, the 599GTB did so on many fronts. The advancements are apparent in its aerodynamics, engine, transmission and drivetrain, engine, brakes and suspension.

Its design was based on an aluminum spaceframe derived from that of the four seat 612 Scaglietti. Ferrari had been developing aluminum forming and joining technologies for years, showing glimpses of what was to come with the 408 RM testbed of 1987, then gradually transitioning its volume production models to this type of construction.

The 599GTB’s chassis consists mostly of extrusions bonded, bolted or welded to cast nodules and body panels. Further, forged aluminum double wishbone suspension and wheels all around contributed to an overall weight of about 3,800 lbs., a reduction of some 88 lb. (40 kg) compared with the 575M. It came standard with 19” diameter wheels in front and 20” wheels at the rear.

The heart of the 599GTB is a DOHC 65 degree 6.0 liter V12 derived from the mill found in the Ferrari Enzo. At the time of its launch the 599GTB’s output of 611 hp and 448 lb-ft of torque made it the second most powerful Ferrari road car ever produced.
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24 Hours of Le Mans Review [SPOILER ALERT]

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The 2014 edition of the 24 Hours of Le Mans is now in the books. One of the three top contenders won the race as expected… but a whole lot of other things happened too. Here’s the short, short version of  events:

LMP-1

Audi took the overall and LMP-1 win with a 1-2 finish, an amazing 13th victory in 16 attempts, though it was not without drama. The third Audi (#3) and #8 Toyota were involved in a crash in wet conditions about 90 minutes into the race. The Audi was unable to continue while the Toyota limped back to the pits and was in the garage for about 50 minutes to repair the damage.

The winning team consisted of Marcel Fassler, Andre Lotterer and Benoit Treluyer in their R18 etron quattro. Le Mans legend Tom Kristensen was part of the team that finished second in the sister Audi after the car experienced turbo problems. His teammates were Lucas Di Grassi and Marc Gene, both ex-F1 drivers.

Gene was called in at the last minute to replace Loic Duval, who was not cleared to race as a precaution following the massive practice crash on Wednesday from which he fortunately emerged largely unscathed.
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Ferrari 360 Modena Millennium Marvel

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At the turn of the century Ferrari introduced the 360 Modena. It was the latest chapter in its storied line of two seat, mid-engine V8 sports cars which began with the 308 GTB in 1975. With a base price of around $150,000 Ferrari’s entry-level model was hardly inexpensive. But in the world of exotic cars it was a relative bargain.

Automobile Magazine said, “The Modena’s performance envelope is too huge for mailing” (Nov. 2003). Such a statement was understandable for a car with zero to 60 mph times of 4.3 seconds, lateral acceleration of 0.95g and a top speed of about 185 mph.

The design adhered to the classic formula of more power, lower weight and better handling. Compared with the outgoing F355 model, Ferrari extended the wheelbase, increased chassis stiffness and reduced weight some 200 pounds. This was accomplished in large part through extensive use of aluminum in the chassis and suspension.

Brakes are 13.0” vented and drilled discs all around, mounted inside 18” wheels. In addition to standard anti-lock brakes and traction control, electronically controlled shocks offer standard and sport modes, with settings varying with vehicle speed and input from three accelerometers.

Styled by Pininfarina, Ferrari’s long time design firm, the body was sculpted to reduce the drag coefficient to 0.335 while increasing downforce to some 400 pounds at 180 mph. A contributing element is the lack of a front grill. Instead one radiator is mounted on each side of the nose. The resulting center channel enables air to be better directed along the flat underbody and through the rear diffuser.

The heart of the car is a 3.6 liter aluminum V8 featuring five valves per cylinder. Redline is a dizzying  8,500 rpm. The 40 valve unit produces 395 hp and 275 lb-ft of torque at 4,750 rpm. Its red intake plenums are visible through a tempered glass cover on the rear decklid.

A dry sump oil system, titanium connecting rods, drive-by-wire throttle system, variable intake valve timing and servo controlled variable length intake runners round out the longitudinally mounted powerplant.

Output is channeled through either a six speed manual transmission or a semi-automatic version with paddle operated shifters. In automatic mode it was reported to be clunky in city driving. But the electro-hydraulic system can execute shifts in as little as 150 milliseconds and precisely blip the throttle on downshifts.

The 360 Modena formed the basis for several variants including the 360 Modena Spider, 360 Challenge and 360 Challenge Stradale. The Modena Spider, while similar to the hardtop berlinetta, features a power operated canvas top and chassis reinforcements which increases weight by about 400 pounds. In 2000 the Spider’s starting price was about $165,000.

The 360 Challenge was built for the one make Ferrari Challenge race series. At approximately 2,800 pounds it weighs 260 pounds less than the standard 360 due to the use of carbon fiber door panels and bodywork front and rear, and the absence of air conditioning, power windows and much of the interior trim.

A roll cage and associated safety equipment (e.g. fire extinguisher) were added. The semi-automatic gearbox received its own oil radiator and a beefier clutch. Brakes were upgraded to larger 14” discs in the front, and four piston calipers front and rear. Shocks are non-adjustable but camber, toe, and ride height are. Pirelli P Zero slicks, combined with lower and stiffer suspension were the finishing touches  for the track. Sticker price was in the region of $185,000.

The 360 Challenge Stradale, the ultimate roadgoing 360, was introduced for the lineup’s final year of production in 2004. A revised rear spoiler and bodywork increased downforce, while larger 19” wheels and carbon ceramic brakes all around and a stiffer suspension – offering sport or race settings – help translate that to mechanical grip.

The cylinder heads were ported and polished and the exhaust system was tuned for lower back pressure, bumping power up to about 425 hp.

The Challenge Stradale is about 240 pounds lighter than the standard coupe through the use of carbon fiber inner door panels, seat shells and center tunnel, and Lexan instead of glass for the engine cover. A racing stripe and sliding Lexan side windows were optional. Really. Some 250 units were allocated for North America at about $200,000 apiece.

Significantly, Ferrari’s utter dominance of Formula One between 2000 and 2004 largely coincided with production of the 360 Modena, which was replaced for the 2005 model year by the F430. The advancements made with the F430 reflect the racing lessons learned during Ferrari’s racing hot streak.