Ferrari vs Porsche: When Slow Growth Wins The Race

This month an article was published about luxury car manufacturer Porsche, reporting a loss of nearly one billion euros, the cancellation of an electric vehicle project with a write-off of 1.8 billion euros, a 26% decline in sales in China, and an extensive cost-cutting plan. Meanwhile, Ferrari announced at the beginning of the month that it has halved its electric vehicle target for 2030, with the new target standing at only 20% of total production, and published a cautious growth forecast. The stock took a 16% hit in one day, but behind Wall Street’s disappointment stands a clear strategy: to grow more slowly and preserve scarcity.

Even luxury manufacturers experience the business tension between rapid growth, adaptation to market demands, and technological innovation. There are broadly two approaches to premium growth. The first is the scale route: expand quickly, invest heavily in new technology, bet on demand that will come, and sometimes discover that the market and regulation don’t behave like the consulting firm’s Excel sheet. Porsche is a painful case study of what happens when you lose control of the pace. In its case, losing control erased profitability very quickly.

The second approach is Ferrari’s slow lane strategy. In 2023, Ferrari produced only 13,663 vehicles, despite enormous demand and revenues of nearly 6 billion euros. The average price of a vehicle is over €350,000. The target the company published for 2030 stands at only 15-20 thousand vehicles, and expected revenues stand at 9 billion euros, meaning growth of 6-9% per year. The revenue growth doesn’t come only from the increase in vehicles but also from price increases and ancillary services. Ferrari’s message is clear: limit supply to preserve value.

Professor Gad Allon from Columbia University analyzes and presents this approach excellently in an article he published titled “Ferrari’s Slow Lane Strategy.” Professor Allon suggests reading the word SCALE differently: Scarcity, Craft, Attention, Leverage, Endurance. According to him, Ferrari implements a completely different model from traditional growth.

Scarcity – planned shortage. Supply always below demand even when demand is breaking records. A limited electric vehicle target not because there’s no capability, but to preserve the brand’s soul and maintain market control. In premium, whoever maintains scarcity maintains value. Craft – internal artistry. Build internally what defines the experience, keep the pace slow so as not to compromise quality and uniqueness. Luxury is built from time, tradition, and precision, not from production speed. Attention – attention engineering. Everyone dreams, only a few receive keys. This isn’t just marketing communication, it’s the engineering of attention that builds mythology, as opposed to Porsche which faces the risk of becoming routine. Leverage – profit per unit. Growing value for each customer through premium pricing, limited series, and custom-tailored products means high profit per unit instead of growing in quantity and seeking profit in volumes. Endurance – long-term resilience. Preserve the brand even if it annoys analysts in the short term.

So what can premium manufacturers learn from this case regardless of the automotive sector? First, expansion doesn’t necessarily equal growth. When you’re premium, sometimes less is the most profitable engine. Second, speed is a strategic decision. If technology, consumers, and regulation are still evolving, excess scale is a risk, not a solution. Third, specific gravity before mass. Deepen value for customers through personalization, service, and ecosystem before increasing volumes. Fourth, set brakes in advance. How much we won’t sell is just as important as how much we will sell.

Bottom line, Ferrari reminds premium manufacturers that rare, when done right, is worth more. Still, the biggest challenge, even for Ferrari, will be identifying when to change approach and hit the gas to avoid becoming obsolete.