If there’s one topic we have covered widely since the coronavirus pandemic started, it has been the collapse of the auto industry.
Over the last week we have detailed how used car prices will likely cripple what little interest in new cars remains, how dealers are scrambling to desperately offer incentives and how ships full of vehicles are being turned away at port cities due to a lack of space and inventory glut.
But, if there’s one silver lining to global central banks widening the wealth gap, its that the super-rich still have plenty of cash to buy exotic vehicles. While demand may be tepid from average run-of-the-mill car buyers, the wealthy have kept a bid under the price of luxury automobiles, Ferrari reported this week.
The maker of the $1.74 million Monza supercar said this week that its order book is “strong” regardless of a 7 week shutdown at its Italian plants, according to Bloomberg. The company’s CFO said on Monday that deliveries in Q1 were actually up 5% from the year prior.
Despite lowing its 2020 guide, the company is predicting a recovery in the second half of the year. The company says it could see faster revenue and profit growth than expected with the recovery as a tailwind.
Bloomberg Intelligence analyst Michael Dean said: “Evidence from the prior financial crisis suggests demand should remain robust. However, the main risk is that production will again be shuttered if there’s a second wave of Covid-19 infections in Italy.”
As Ferrari returns to work, the company may wind up asking employees to work Saturdays and shorten summer holidays in order to catch up with its order book.
Plants in Maranello and Modena will be back to full production on May 8 and Premier Giuseppe Conte is working toward a gradual re-opening of the country’s economy after an almost two month halt once it was discovered that Italy was a epicenter of the coronavirus outbreak.
Despite some cancellations, Ferrari says the numbers are “nothing that we would deem to be alarming”. The company introduced five new models in 2019 and boosted sales to more than 10,000 units per year for the first time in the company’s history. Ferrari delivered 2,728 cars in Q1.
Massimo Vecchio, an analyst for UBI Banca said the company’s results show “strong resiliency”. At the same time, automakers like Daimler and Renault have withdrawn guidance completely.