In an attempt to keep the focus on its mass-market audience, the newly formed Fiat Chrysler group has announced that it is splitting from its well-known luxury Italian brand, Ferrari. Fiat Chrysler plans to list shares of Ferrari stock on the New York State stock market and possibly on European stock markets, as well.
While there is no set date for when the stocks will be listed, the car company has said that 10% will be up for grabs, while the rest are to be distributed among Fiat Chrysler shareholders.
Fiat currently owns two luxury sports car brands: Ferrari and Maserati. Although it is an iconic car owned by many celebrities and used in many TV shows and movies, the Ferrari doesn’t align with Fiat Chrysler’s mass-market audience. The luxury sports car hasn’t performed well this year on the racetrack either, marking one of its worst years in Formula One racing history.
Luca Cordero di Montezemolo, Ferrari’s chairman of 23 years, was pushed out of his position back in September and replaced by Fiat Chrysler’s CEO Sergio Marchionne.
The separation of Ferrari from Fiat Chrysler is expected to be completed by next year, but an exact date hasn’t been announced.
“The separation of Ferrari will preserve the cherished Italian heritage and unique position of the Ferrari business and allow F.C.A. shareholders to continue to benefit from the substantial value inherent in this business,” said chairman of Fiat Chrysler John Elkann, according to The New York Times.
Fiat Chrysler only recently began trading on the New York Stock Exchange after the merger of the two automakers was approved. Fiat took full control of Chrysler earlier this year after Chrysler found itself facing major financial woes.
Fiat Chrysler’s main focus is on targeting middle-class families with its line of safe and affordable vehicles, like the FIAT 500, which won 2008 European Car of the Year award. By splitting from Ferrari, both automakers will be able to focus on selling their different vehicles to their separate target audiences.