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Exclusivity and Brand Equity

Current CEO at Ferrari, China

IP Interview
Published on June 14, 2020

Why is this interview interesting?

  • The focus on customer value and brand equity above anything else at Ferrari
Executive Bio

Giuseppe Cattaneo

Current CEO at Ferrari, China

Giuseppe is the Current CEO at Ferrari, China and has over 25 years experience working in China. From 2004-9, he was CEO of Pirelli’s China Division before being promoted to CEO of APAC in 2009. Giuseppe then joined Ferrari as President and CEO of Far East Asia in 2013 before rejoining Pirelli as CEO of APAC for another three years in September 2014. Giuseppe has recently rejoined Ferrari in 2020 with full P&L responsibility of the China business.

Interview Transcript

As a leader, how did you think about fostering or encouraging this Ferrari culture, in China?

Already we have done many good things. We are continuing our penetration in awareness. Of course, Formula 1 helps a lot. As a matter of fact, having a Grand Prix in China, for the last 15 years, it helps a lot to help people know our brand, to know our heritage and help us to have space in the media. We are not in a rush; that’s our advantage. We are not in a rush and we don’t need to push. This is a philosophy that works for everything. We don’t need to be pushing too much. We have time. I don’t want to look as if I don’t care about the result and I’m not motivated enough. For us, of course, the financial result is very important and we are working, as you said before, to satisfy our stakeholders, whether they are shareholders or not.

But, at the end of the day, the philosophy is, make your client happy and be sure that you deliver the right value, up to the expectation of the client. If you work like that, you work with a medium to long-term perspective, and maybe you don’t get 100% of the profit you can get if you use a short-term approach, but you build up more and more brand value and your equity value, because we believe that that is the real value of the company. It would be easy to come along with a very low-priced Ferrari, say half the price of today, and sell thousands and thousands of cars. Then what? Then, in five years’ time, you are just another brand. You are no longer the most dreamed of car in the world. You are one of the many. That’s not our target. We have to protect our uniqueness, our exclusivity to the end. As I said before, for me, the key point is – sometimes this is true, it’s not easy to let the Chinese consumer aware of it – when you buy a Ferrari, you buy for the rest of your life. You are not buying a car for the next three, five, eight years. You buy it and you will always be a Ferrari driver, a Ferraristi, no matter what.

What do you think it is about the philosophy of, we don’t need to rush? We don’t need to push. Is it the Italian roots? Is it the founder? It’s quite unique in the sense that it’s not always pushing full throttle.

Honestly, also many other brands, not Italian, are doing the same.

Louis Vuitton, Hermès.

Exactly. If you look at the fashion industry, there are brands that open tens, hundreds of showrooms, around the world and there are brands that keep a limited number of showrooms and that much more exclusivity and you have a waiting list to get a bag. On this, I would say, business model wise, we are not completely unique. It’s a matter of exclusivity. If you push, there is a trade-off. If you push, you lose the exclusivity. The exclusivity gives the value to your company. I’m not playing the game of being totally outside the economic dynamics. We are in and we have to deliver good economic results, which are satisfactory for all the people involved. But we will never sell one car more than demand, because if you do that, the result is that you reduce your profitability, because in order to push, you have to give in. We never give in. It’s not that we don’t rush or we don’t push. We push in our own way. I will never discount a car, so if you want a discount, there is another showroom over there. We are selling unique pieces and we are selling something that is forever, that maybe you will drive and you will give to your son or the son of your son. There are Ferraris around, from 50 years ago, that are precious like a painting. You can see all the classic cars that can be sold for 10, 15, 20, 30 million. That’s our thing. We’re not pushing, because we believe that our car will never be a piece of metal.

If you follow that philosophy, you must be consistent. Just to be clear, it’s not a state of mind. It’s simply a very rational decision because we know, very well, that the moment you push, you decrease the value of the pre-owned and you trigger a negative circle that, business-wise, is not profitable.

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