Valuation Beats Volume
Insight
Ford makes 160x the number of cars that Ferrari does. Yet Ferrari has a higher market capitalization than Ford, Volkswagen, Honda, Stellantis, and Mercedes-Benz. Ferrari makes all their cars mostly by hand, inefficiently, in a single town, and has the highest profit margins in the entire auto industry. The handcrafting and inefficiency are not weaknesses; they are what makes the margins possible. Volume is the enemy of this model, not the goal.
Related Concepts
Source Context
"Ford makes 160 times the number of cars that Ferrari does. Yet Ferrari has a higher market capitalization. They're worth more than the Ford Motor Company and Volkswagen and Honda and Stellantis and Mercedes-Benz."