Ferrari Surpasses Hermès as Most Valuable Luxury Brand

In a significant shift in the luxury market, Ferrari has overtaken Hermès to become the most valuable luxury company in the world, as determined by stock multiples that assess growth and profit potential. This milestone reflects Ferrari's strategic focus on maintaining exclusivity and emotional connection with its customers. CNBC recently visited the company's headquarters in Maranello, Italy, to gain insights from CEO Benedetto Vigna on what defines Ferrari as a luxury brand. Vigna, who took the helm in 2021, emphasized the importance of technology in driving Ferrari's growth while adhering to the company's foundational strategy of producing fewer cars than the market demands. He articulated that Ferrari's luxury status stems from its ability to deliver unique products that resonate emotionally with consumers. "We make an emotional product," he stated, highlighting that luxury transcends mere quality or price. The CEO also discussed Ferrari's "value over volume" approach, which allows the company to achieve double-digit profit growth with only slight increases in production. This strategy ensures that each vehicle remains exclusive and desirable. However, industry insiders suggest that prospective buyers often face a challenging path to acquire new models, particularly limited editions, akin to the experiences of Rolex and Hermès customers. Ultimately, Vigna underscored that the people are at the heart of Ferrari's operations, reinforcing the brand's commitment to fostering deep connections with its clientele while navigating the competitive luxury landscape.