AN INDEPENDENT FERRARI MAY HAVE TO MAKE MUCH MORE FUEL-EFFICIENT CARS

[Love Pulse]

WORD THAT FIAT Chrysler Automobiles is spinning off Ferrari to make it an independent automaker pleased shareholders but has us a bit worried. Ferrari, part of the Fiat family since 1969, has been making amazing cars lately, and revenues are up. But the company's longstanding practice of strictly limiting production to favor exclusivity over volume may give way to shareholder demands for increased production — and revenue.

That's troubling, and not just because Ferrari — which built only 6,922 cars last year — always has had the mystique of the unattainable. An independent Ferrari cranking out more cars would suddenly find itself subjected to America's strict Corporate Average Fuel Economy standards, which place increasingly tough fuel efficiency requirements on automakers. If shareholders want Ferrari to grow, its cars will have to become significantly more fuel-efficient. Ferraris are beautiful. They are fast. They are nimble. And they are thirsty.

But don't despair. There are at least five ways Ferrari can meet, and perhaps even skirt, those regulations, and only one of them is reason to buy a Lamborghini instead.

Ferrari was led by its founder and patriarch Enzo Ferrari from its founding in 1947 until 1969, when Fiat acquired a 50 percent stake in 1969. That expanded to 85 percent in 2008, one year before Fiat saved Chrysler. Now Fiat Chrysler wants to spin off Ferrari with an IPO. The plan is to offer 10 percent of outstanding Ferrari shares to the public and reserve the rest for current Fiat Chrysler shareholders, including Piero Ferrari, Enzo’s only living son. If another company (VW? Geely?) Or an exceedingly wealthy investor grabs most or all of that 10 percent stake, it will hold tremendous sway over how the business is run. “They’re not gonna be thinking about Ferrari heritage," says Karl Brauer, senior editor at Kelley Blue Book. "They’re gonna be thinking about profit.”

In Porsche's Tire Tracks
One way to increase profit is to increase sales by building more, and perhaps more varied, cars. Porsche offers an example of how an automaker can move beyond its niche to offer sedans and even SUVs. “That is a way to increase volume," Brauer says. "It also is a way to increase average fuel economy for a brand.” Auto industry insiders and snobs may snigger that Porsche has sold out, but with cars like the new Cayman and 918 Spyder, the brand has maintained its reputation for making great sports cars, along with family-friendly people movers.

An independent Ferrari building more than 10,000 cars would have to meet will have to meet CAFE standards on its own. The government standards, introduced in 1975, require the average fuel efficiency of all the cars an automaker sells, across its brands, to reach a certain number. If Volkswagen sells two Golfs that get 36 mpg and one Lamborghini Huracán that gets 16, its CAFE number is 30.