Ferrari chairman quits to leave Fiat's Marchionne in driving seat

Wed Sep 10, 2014 10:09am EDT
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By Agnieszka Flak and Stefano Rebaudo

MARANELLO Italy (Reuters) - Luca Cordero di Montezemolo, chairman of Italian luxury sports car maker Ferrari, is quitting to be replaced by the boss of parent group Fiat FIA.MI after the two men clashed over strategy and the Formula One team's poor results.

Montezemolo, one of Italy's best-known and most colorful businessmen and a protégé of Fiat's founding Agnelli family, will leave on Oct. 13. That day, the newly merged Fiat Chrysler Automobiles (FCA) is due to be listed in New York.

Fiat Chief Executive Sergio Marchionne hopes the allure of Ferrari, one of the world's strongest luxury brands, will help drive U.S. investor interest in the new automaker. Longer term, however, the question is whether the 62-year-old Italian-Canadian, whose pedigree is in the mass-market world of Fiat and Chrysler, can maintain the cachet of the Ferrari brand.

Ferrari has so far kept a tight lid on volumes, limiting production to 7,000 cars per year as a way to preserve the exclusivity of its cars. But Marchionne said during a news conference on Wednesday this number could be raised gradually.

Under Montezemolo, whose penchant for exquisitely tailored suits is a stark contrast to Marchionne's casual, no-tie college student look, Ferrari raced to the top of the Formula One grid.

The glow of Ferrari's victories on the racetrack increased revenues tenfold and tripled sales volumes, helping the Italian family business whose blood-red cars were snapped up by the super-rich become one of the world's most powerful brands.

But Montezemolo's relationship with Marchionne had soured in recent years, because of disagreements over the role of the luxury sports car business within the Fiat group, people with knowledge of the situation said.

Chairman since 1991, Montezemolo has wanted to keep Ferrari autonomous, while Marchionne has pushed to better integrate the business within Fiat to boost the group's move into the premium end of the car market as it seeks to rival the likes of Volkswagen (VOWG_p.DE: Quote) and BMW (BMWG.DE: Quote).   Continued...

Sergio Marchionne, Chief Executive of Fiat Chrysler Automobiles (FCA), gestures during a news conference in Turin in this March 31, 2014 file photo. REUTERS/Giorgio Perottino/File