There is a basic principal of economics that we all know about called supply and demand. As long as the demand for a product exceeds the supply, the price can stay relatively high. If the supply grows beyond the demand, the price drops. US automakers have proved this principle in no uncertain terms as demonstrated by the level of incentives they have to provide to move their vehicles.

Ferrari, on the other hand, has always tried to make sure that the supply of its sports cars fell a little bit short of demand. That has allowed it to keep its prices high and maintain an exclusive image. Unfortunately, it has faced an enviable problem in the last few years as new markets have exploded in places like China and newly wealthy individuals decide they need an insanely fast car to demonstrate those financial resources to the local populace.

Ferrari doesn't want to find itself in the situation that Porsche faced in the late '80s when that automaker greatly expanded production to try and meet demand, then suddenly found itself stuck as a recession hit and it had a lot of unsold cars. Over the past seven years, Ferrari production has swelled from 4,000 to over 6,000 this year, and at the same time waiting lists have also doubled from twelve to twenty four months. A tough problem to deal with, but at least a Ferrari is a little harder to knock off than a Hermes bag or a Rolex watch. In the meantime, dealers are trying to steer new buyers toward used models to get them into the family while they wait for a new example, and the company is keeping tabs on dealers to quash abusive waiting list practices.

[Source: Wall Street Journal]

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