Fiat Chrysler Automobiles (FCA) has announced that they will be spinning off the Ferrari brand into its own separate entity with about 10 percent of the new company’s stock going to the exchanges in the U.S. and Europe sometime next year and the rest going to current FCA shareholders.
FCA cites the move as part of a “capital plan appropriate to support the Group’s [FCA’s] long-term success.” Separate paths for FCA and Ferrari were given as part of the 2014-2018 Business Plan, says Sergio Marchionne.
This is a bold move as Fiat has owned Ferrari since 1969. This spinoff announcement comes after Luca Cordero, CEO of Ferrari, left after giving heavy criticism to Fiat for plans to expand the Ferrari production base as “watering down” the famous Italian nameplate.
The brand shows profit, but not on a huge scale and does so mostly based on licensing of branded products rather than vehicles.