Fiat Chrysler to sell Ferrari to fund a five year plan

Fiat Chrylser Automobile (FCA) to sell Ferrari to raise funds for the company’s five year plan. CEO Sergio Marchionne hopes to put it on the stock market here in Europe and the USA next year.  The sale could give Marchionne up to $1bn in funding for the project.

Some more recent Ferrari customers see the brand as a luxury brand rather than a high powered sports car manufacturer. This may also be the case with potential investors. So is it a good idea? Will Ferrari go down hill? Who will buy them?

FCA owns 90% of Ferrari and the other 10% is owned by the Piero Ferrari, son of founder Enzo Ferrari. The decision to offer the IPO(Initial Public Offering) comes only six weeks after FCAs previous chairman stepped down,  Luca Cordero di Montezemolo. He had opposed the Ferrari IPO and was also not in favour of capping production to just 7,000 per annum as he felt Ferrari could easily achieve 10,000 per annum.

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Marchionne had the difficult task of picking Chrysler back up off its feet after the bankruptcy of 2009. Now he has an even more challenging role of competing healthily with Fiat Chryslers competition and to achieve better economies of scale.

His approach to achieve this? Well to sell 7 million vehicles by 2018 of course. This will up it from 4.4m last year. However, in this plan he had said that Ferrari was not for sale but had put an estimated price of $5.5bn on it but felt it could probably achieve a lot more.

Marchionne said that the company would spend €48bn on research, development and capital expenditures for new models. He would get this money from operations but may also issue debt. He did this by disclosing a $2.5bn convertible bond and selling 100 million of Fiat Chryslers own shares worth about $1.1bn. This and funds from the Ferrari IPO will save the company in the event of a global downturn.

The company has been valued at between $7.59bn and $12.65bn by analysts.

The IPO is healthy for the Ferrari brand at the moment. It means it is being watched. The limited production run means that there are up year long waiting lists meaning demand is high. Marchionne can see new car sales continuing to increase but if the production was to increase he could see this begin to settle.

FCA reported a flat third-quarter profit last Wednesday. Profits increased in the North America and Asian regions whereas in Europe and Latin America they saw average to declined profits.

Paris Motor Show 2014 – So Far

I have become a bit of a Twitter freak within the last year or so and I follow anything motoring related that’s interesting. Giz a follow there sure, IanFitzpatrick3. Anyway, I’ve been following a bit from the Paris Motor Show so I thought I’d share what it had to offer with you:

Volkswagen XL Sport 
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The XL Sport is, as you can probably tell, a sports version of the famous 280mpg diesel-hybrid VW developed back in 2011 , the XL1. The XL Sport is powered by a 197bhp Ducati Superleggera V-Twin engine. Lets hope this goes into production!

Audi TT Sportback Concept
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Only last week images were leaked of the TT Sportback and does it look good! A variant of the recently renewed TT, this one has 5 doors and 400bhp from a 2.0 litre turbocharged four cylinder engine. The 400bhp is combined with 450nm of torque which gives it a 0-100km/h time of 3.9 seconds.

Lamborghini Asterion LPI-910 4 Hybrid
Lambo have released yet another stunner! The Asterion LPI-910 4 Hybrid is, other than a mouthful, a 910 bhp hyper car. 910 Brake stonking horse power!
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hat do you think of the styling? When I first saw it I thought the front looked bit too similar to the Huracan. Still love it though!

Mercedes-AMG C63
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Note the name change, no longer C63 AMG now the AMG C63. It looks, well like the rest of the Merc line-up really. Two variants will be available, both V8s. The standard one will give you 469bhp and if that isn’t enough the S model gives you 503bhp! 0-100km/h in the standard is 4.1 seconds and 4.0s in the S. The estate version, pictured, adds a tenth of a second to the time. The old C63 did 0-100km/h in 4.5 seconds so it’s an improvement.

Mercedes AMG GT
The beast everyone has been waiting for is here at last, the Mercedes AMG GT. Again two variants will be available, a GT and a GT S. The same V8 will power both but with 456bhp in the GT and 503bhp in the S. It is not a direct replacement for the SLS but will be Mercs flagship model. It will rival the likes of the Porsche 911 Turbo and the Jag F-Type R.

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2015 Volvo XC90
Last but not least, the all new Volvo XC90. This mightn’t be the most exciting of the line-up I have spoken about but it is the safest. Volvo hopes it will be the safest car on the road.  You may remember I wrote about this when it was released. You can read the article here: http://driversedition.com/index.php/the-xc90-bids-you-farewell/

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Thats all I have seen so far and I am sure there is more interesting debuts to come. I will try keep you posted on Twitter.

Ciao