Maranello to Mumbai. #Ferrari70

Ferrari-70-Mumbai

Last weekend (December 17, 2017), Navnit Motors the Mumbai dealer for Ferrari held an event to celebrate Ferrari’s 70th anniversary. A total of 25 Ferrari’s showed up and it was an amazing sight to see a sea of red Ferrari’s. If you love Ferrari’s then this was the place to be. This blog post is broken into 3 parts:

  1. Photos and videos from the Ferrari 70th anniversary event in Mumbai
  2. History of Ferrari in India
  3. History of Ferrari

Part 1: Photos and videos from the Ferrari 70th anniversary event in Mumbai

List of cars:
00 – 488 GTB, Red
01 – 488 GTB, Yellow
02 – 458 Speciale Aperta, Red
03 – GTC4Lusso, Orange
04 – 488 Spider, Red
05 – 458 Spider, Red
06 – 488 Spider, Red
07 – 458 Spider, Red
08 – 488 GTB, Red
09 – 488 GTB, Red
10 – 458, Red
11 – 458, Red
12 – F430, Red
13 – California, Blue
14 – 488 GTB, Red
15 – 458, Yellow
16 – 488 GTB, Red
17 – 458, Red
18 – 458, Black
19 – California, Red
20 – 458, White
21 – California, Red
22 – F430, Red
23 – F430 Scuderia, Red
24 – GTC4Lusso, Red

Part 2: History of Ferrari in India
Ferrari has had a storied past in India with many of biggest names in Bollywood, business and sports owning a Ferrari. Sachin Tendulkar was famously given a Ferrari 360 Modena from Fiat as a gift in 2002 for achieving his 29th test century. Ratan Tata, Vijay Mallaya and Gautam Singhania have owned Ferrari’s as well. Gautam was the first person in India to get a Ferrari 458, that too in yellow and not the traditional rosso corsa (racing red) color. In Bollywood, Sanjay Dutt, Ajay Devgan and Imran Khan are actors that have owned Ferrari’s.

Prior to 2011 there were no dealerships to walk into and buy a Ferrari. At that time you had to work with “agents” or know someone at Ferrari to order a car. Then you had to deal with the whole issue of importing the car, getting it homologated for India, getting it registered and having a small pooja for the car before you could drive it on the roads of India. If all the sounds painful, it was. And yes, homologation is a real word. All of this was about to change in 2011.

Before we get to 2011 let’s go back to 2003 to set the stage. In 2003, Ashish Chordia of Shreyans Group was a mover and shaker with high-end clothing brands and soon wanted to make his mark on the Indian automotive scene. He was able to get a sweetheart deal from Porsche AG where his company Precision Motors would be the sole importer/distributor of Porsche products and would also maintain their dealer network. In essence, he would be Porsche’s one and only guy on the ground in India. For Porsche it seemed like a great idea since the volumes were low, they would only have to deal with one person. That turned out to be a terrible mistake on the part of Porsche AG.

By the time the financial crisis hit of 2008, Porsche customers were complaining of advances being taken for vehicles and delivery dates kept on being pushed. With Ashish controlling the entire operations in India, customers really had no recourse. Most of the issues never made it to the press, so from the outside everything looked fine.

In 2010, Ferrari came knocking and Ashish hit the jackpot and became the sole importer/distributor and dealer for Ferrari. Ashish negotiated the same setup as he had with Porsche AG. He setup Automobili Italia Pvt. Ltd. which would import and distribute Ferrari’s and sell them exclusively through his dealer network, which initially was going to be in Delhi and Mumbai. In May 2011, the Delhi showroom was opened and the Mumbai showroom was rumored to be setup in Poonam Chambers in Worli. However, that Worli showroom never opened and by early 2014 Ferrari severed all ties with Ashish Chordia.

Ashish had built a bad reputation with his customers not only at Ferrari but also with his Porsche dealerships. In fact, Fortune Magazine wrote an article about his lawsuit with Porsche which eventually led him to flee the country.

After Ferrari shut down operations in 2014, a year later it realized it needed to re-enter India and this time it would be the sole importer/distributer of cars and then it would appoint separate dealers to sell the cars. In Delhi, Select Cars was chosen and for Mumbai, Navnit Motors was chosen to cover the West and South regions of India. Navnit Motors has a long history of selling cars and also many high-end cars like Rolls-Royce, Jaguar, Land Rover and BMW. With this arrangement, Ferrari avoided many of the issues that led to their demise the first time around.

Part 3: History of Ferrari
Back in 1947, Enzo Ferrari created the 125 S which was badge as a Ferrari, the first one. It has been a 70 year journey that has created a cult like following for the “prancing horse” (The Ferrari logo) and in the process Enzo built a racing empire. Maranello, Italy is the current headquarters of Ferrari.

When I had visited the Ferrari Museum in Modena, I was surprised to learn that Enzo Ferrari had a term-sheet to sell 50% of Ferrari to Ford in 1963 for $10 million. However, at the last minute Enzo said no. But, in 1969 he ended up selling 50% to Fiat SpA, which I didn’t realize was an acronym for Fabbrica Italiana Automobili Torino (FIAT).

There is no point in me writing about the complete history of Ferrari, so I suggest you start by reading the Wikipedia page for Ferrari.

Subscriptions as a Service (SaaS)

216702_new_volvo_xc40_exteriorFor many years we have been hearing the term Software as a Service (SaaS), where software is licensed on a subscription basis and charged on a monthly or yearly cycle. Companies like Salesforce and Dropbox have built their companies on this pricing model.

In 2012, Adobe which is known for products like Photoshop and Creative Suite took a chance and decided to move from a traditional pay once license model and move to a SaaS model. The first year was a disaster for revenues and their stock price took a hit. Today, in retrospect that move was brilliant – revenues are up, more people are using their products since the price points are reasonable and software piracy has come down. With the success that Adobe showed many other large companies are moving to a SaaS model, most notably is Microsoft.

Over the past couple of months, Porsche and Volvo have announced their subscription programs for cars. The two programs are very different, Porsche charges $2000 a month and gives you access to a fleet of vehicles such as 718 Boxster, Cayman S, Macan S and Cayenne which you can pick and choose each month. The plan includes vehicle tax, registration, insurance, maintenance and detailing. This is not a lease, where you typically have a large upfront deposit and still have to pay for your own vehicle tax, registration, insurance and maintenance. The Volvo plan is for $600/month and gives you access to an XC40 SUV.

For many people the above model for cars is super. You get a new car every couple of years and the biggest issue of maintenance is solved. It’s in the best interest of the car company to make sure their cars are trouble free since in the end they will be footing the bill if something happens. Of course, what will happen to the car dealers with their showrooms?

Software and cars are not the only businesses I see where this subscription business model can be implemented, what I’m calling Subscriptions as a Service (SaaS). I envision many physical products moving to this model of essentially renting something and all the costs are covered in the monthly/yearly fee. In your home white goods like TVs, refrigerators, washing machines, a dryer or an air-conditioning unit would be a perfect fit. Yes, there are places where you can rent or rent-to-own these devices but those companies are notorious for renting at insane markups and usually do not cover the maintenance or service costs. I’m talking about the manufacturer offering these products directly on a subscription model to the end consumer under their existing brand or a new private label.

Suppose you put your property on Airbnb. You rent it out and something happens to the TV or refrigerator you will most likely have to coordinate with some local person to get those issues resolved. With a subscription service all the issues and headaches are handled by someone else.

Also, you can space out your payments and if you don’t want to rent the property for a year, you can cancel the TV, washing machine, dryer, etc. This model for white goods works brilliantly. This again ensures that the manufacturers make great products because if not, they will end up eating the cost of fixing any issues. With this shift to a sharing economy model, subscriptions for everything makes sense.

Update:
1. A great article on the history of renting white goods
2. NerdWallet series on Rent-A-Center horror stories