New CEO For Ferrari

Ferrari announced today that Luca Cordero di Montezemolo will step down as chairman of Ferrari as of Oct. 13 and will be replaced by Fiat Chrysler CEO Sergio Marchionne, Fiat said in a statement today.

The departure of Montezemolo, 67, was widely expected after escalating clashes between the two executives over strategy and the role of Ferrari within the Fiat group.

Ferrari is a key component of Marchionne’s plans to expand in luxury cars to better compete with Volkswagen, which owns Lamborghini among its stable of high-end nameplates.

Montezemolo wanted to maintain Ferrari’s autonomous status and limit sales to about 7,000 cars a year to preserve the brand’s exclusive allure. That clashed with Marchionne’s goal of having Ferrari bolster a shift by Fiat into upscale cars as part of its merger with Chrysler Group.

Marchionne told reporters today that Ferrari will continue to limit annual sales but may gradually raise the cap to cater for rising demand. The cap could undergo “small changes” in some markets to prevent rivals getting an advantage by letting waiting lists get too long, he said. A Ferrari spokesman said the U.S. is one of the markets where demand for Ferrari cars is strong.

Ferrari will continue to provide engineering assistance to Fiat Group’s Maserati and Alfa Romeo brands to improve the quality of their cars. “Ferrari is a good school. Its importance within the group should not be underestimated,” Marchionne said.

Marchionne added that his new role as Ferrari chairman was not temporary and that bringing in a new chief executive for the brand was not on the agenda. He said there is no plan to fold Ferrari into the rest of Fiat Chrysler. “The success of Ferrari is mainly due to its unique brand,” he said.

Montezemolo’s Oct. 13 resignation date coincides with the day when Fiat plans to list Fiat Chrysler Automobiles (FCA) in New York after completing a merger with its U.S. business and cementing a shift of the Italian group from its home for the past 115 years.

‘New phase’

“Ferrari will have an important role to play within the FCA Group in the upcoming flotation on Wall Street. This will open up a new and different phase, which I feel should be spearheaded by the CEO of the Group,” Montezemolo said in a statement.

Marchionne said that he and Montezemolo had discussed the future of Ferrari at length and that “our mutual desire to see Ferrari achieve its true potential on the [Formula One] track has led to misunderstandings, which became clearly visible over the last weekend.” Marchionne said on Sunday that the recent disappointing performance of Ferrari’s F1 team was “unacceptable” and that it was “absolutely non-negotiable” that Ferrari should win F1 races. He also took issue with comments from Montezemolo offering to continue running the brand for three more years, saying that “nobody is indispensable.”

Under Montezemolo’s tenure, Ferrari raced to the top of the F1 standings, increased revenues tenfold and tripled sales volumes as the Italian family business grew into one of the world’s most powerful brands.  Will this move benefit the auto giant?

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