The wild economics behind Ferrari’s domination of the luxury car market

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Subscribe to enjoy similar stories. With a list price of $3.7 million, Ferrari’s new “hypercar" was revealed to the public in October with a twist: It wasn’t available for sale. All 799 units of the low-slung, high-haunched F80 model—the most expensive production vehicle in Ferrari’s history—had been promised to top customers like Luc Poirier.

The Montreal real estate entrepreneur already owns 42 Ferraris. He said he felt “lucky" to be allowed to buy yet another. “To be chosen by Ferrari for one of their hypercars is a true milestone for any collector," he said.

Money isn’t enough to buy a top-of-the-range Ferrari. You need to be in a long-term relationship with the company. By leveraging the rabid fandom of its customers through a business model based on uber-scarcity, the storied Italian company is enjoying a new golden age.

Following an almost tenfold increase in the stock since its initial public offering almost a decade ago, Ferrari is now worth $90 billion, making it the most valuable car company in Europe—despite delivering just 13,752 vehicles last year. Volkswagen, which sold more than 9 million cars last year, has a market capitalization that is roughly $40 billion lower. Most of Europe’s auto industry is plagued by a weak domestic market, a costly transition to electric vehicles and new competition from China.

Like Tesla, which became the most valuable U.S. carmaker by attracting a tech-company valuation, Ferrari has won the European prize by channeling similarities with a more reliable peer group: French handbag makers. “We are not—we are not—an automotive company," said Chief Executive Officer Benedetto Vigna in a recent interview in Maranello, the city in northern Italy where Ferrari is based.