Unit growth – cars

First, look at Porsche and Ferrari in isolation. The former generates a
margin on earnings before interest and tax of 17 per cent. Ferrari’s margin
is a little higher at 20 per cent.

That is double Daimler’s overall margin,
proving that performance cars can be very proftable if customers are
willing to pay up. Of course, Porsche and Ferrari exclusively make high-
end performance cars and their customers have a long history of being
willing to pay a premium to own either of the two horse logos.

But are car lovers willing to pay a premium for a performance car built by a non-
performance car brand? After all, while Mercedes and BMW have long
been associated with motorsport and particularly Formula One, they are
probably best known for building vehicles for everyday driving.