News - Ferrari
Ferrari focuses on resale value to soothe LCT sting
“Exclusivity” maintains used prices and happy customers says Ferrari
19 Jun 2014
AUSTRALIAN Ferrari customers are hit harder by the luxury car tax (LCT) than almost any other brand, but the Italian car-maker says by maintaining a resale value higher than any competitor, it takes the sting out of LCT.
The iconic Italian brand's latest model – the California T – is the least expensive prancing horse-badged vehicle sold in Australia, but more than $100,000 of luxury car tax fattens the price tag to $409,888 before on-road costs.
However, Ferrari Australia president and CEO Herbert Appleroth says that with a “market leading” resale value of about 65 to 70 per cent after three years, returning customers are still getting a good deal and are happy to stump-up the cash for a new California.
“It's not just the sticker price of a Ferrari which is of significance to a customer because they are usually trading in another car,” he said.
“If you deliver a pre-owned Ferrari that has a higher investment level, the amount they have to pay is less.
“With something as desirable as a Ferrari, the emotion takes over and that's also why our focus on resale value is so important.” According to Mr Appleroth, resale values are boosted by three factors “the quality of the product, the success of the product (or desirability when new) and the number built”.
In other words – by producing aesthetically pleasing, high-performance vehicles in numbers deliberately lower than demand, the price of a used Ferrari soars above its more readily available competitors.
By applying this formula to the new California T, in just one evening, Ferrari planned to take 12 months worth of orders at the official Australasian launch earlier this week.
Ferrari customers are typically representatives of a more successful demographic, but the car-maker says that even very wealthy shoppers see the significant chunk of LCT as “a barrier”.
“They are super-smart and they don't just give money away,” said Mr Appleroth.
“A tax that makes anything 33 per cent more expensive, I think, we all stop to think about it.” LCT was originally established to encourage the purchasing of locally made vehicles, but with the demise of the Australian car manufacturing industry, the prestige Italian car maker is campaigning to have the LCT abolished.
“What's the need for a luxury car tax now? Without a local car industry what's the use of it?” said Mr Appleroth.
“No we don't like it and it affects our product more than any other because we are super-premium.
“We are currently lobbying with the FCAI for the abandonment of LCT. We think it is unnecessary and should be scrapped.”
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