The market value of companies in the automotive industry has been quite impressive recently. Nikola Truck Company, which has never sold a single vehicle and has zero revenue, has a market value of US$31.8 billion, which is higher than many century-old automobile manufacturers. The business is still high; then the market value of its younger brother Tesla surpassed Toyota Motor, reaching 190.1 billion U.S. dollars, becoming the world's highest market value car company.

What I want to talk to you about today is Ferrari, another car company with a record market value. At a time when the global auto industry has been hit hard by the epidemic, many supercar brands have laid off employees and sales have fallen sharply. However, Ferrari's market value has reached US$30 billion, not only surpassing established car companies such as General Motors and Ford, but also surpassing Its parent company, Fiat Chrysler.

As a well-known supercar brand, Ferrari has a long racing tradition and a high profit margin, reaching 24%. When Fiat Chrysler decided to take Ferrari public in 2015, its market capitalization was only $9.8 billion. In early 2016, Ferrari officially separated from Fiat Chrysler. When the late Fiat Chrysler chairman Marchionne decided to spin off Ferrari and list it independently in 2016, the outside world was not optimistic about the deal. At that time, Ferrari's market value was US$11 billion, and many analysts predicted that Ferrari's market value was not even worth US$11 billion, but at most US$5 billion.

More than three years later, Marchionne has passed away due to illness, but Ferrari's market value has not fallen as analysts predicted, but has tripled. At a time when the global economy is in turmoil, investors seem to have discovered that investing in luxury sports car brands is a good choice.

And unlike other supercar brands, the value of the Ferrari brand itself even exceeds its automotive products. Marchionne once famously said that the value of Ferrari is largely supported by the brand itself, and the value of selling cars is nothing more than an accessory. In other words, the Ferrari brand is very valuable even without selling cars.

Among the many luxury car brands, Ferrari also has the best side business. We can see Ferrari's LOGO on many clothing and watches, and it even has its own theme park in Dubai. Of course, licensing the brand LOGO to so many clothing or other products is risky. If any product has quality problems, it will bring shame to the Ferrari brand.

So Ferrari is also very strict in choosing brand cooperation, and generally only cooperates with high-end brands. For example, in 2019, Ferrari reached a cooperation with another well-known Italian brand, Giorgio Armani. As both Italian luxury brands, Armani and Ferrari have the same cultural genes. The cooperation between the two parties is a powerful alliance that can promote the business development of the two brands.

Precisely because Ferrari’s side business is so prosperous, its diversified business also allows it to better withstand risks. When the sports car business declines due to the economic impact, other businesses can make up for it. It is not surprising that the market value hit a new high.

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This article comes from the author of Autohome Chejiahao and does not represent the views and positions of Autohome.