Di Montezemolo Says Fiat Unlikely to Sell Ferrari Stake

Cash-strapped Fiat is unlikely to sell any of its stake in Ferrari when the successful sports car unit is finally listed, Ferrari Chairman Luca di Montezemolo said today.

Faced with losing potentially lucrative spoils of an IPO as stock markets tumbled, Fiat sold 34 percent of Ferrari to Mediobanca for 775 million euros ($844.9 million) last June, a price many analysts said was too high.

Some media have suggested that Fiat could sell some of its remaining 56 percent stake in an initial public offering to raise more money for its troubled mass-market car unit.

"I really don't think they're going to do that," di Montezemolo told Reuters at the Geneva car show.

Asked when the bright red brand would hit the stock market, di Montezemolo, who took a place on Fiat's board last week, said the timing was up to Mediobanca and its allies.

"Listing is still a project but it's up to shareholders, not management. In this market situation, to talk of an IPO seems absurd but it is still the intention of Mediobanca to sell its stake," he said.

Last year, Mediobanca sold some of its Ferrari stock to Commerzbank, whose CEO last month said a listing was on the cards for this year, markets willing.

Sales Seen Steady

Last year, Ferrari made an operating profit of 70 million euros, up from 62 million in 2001, keeping its operating margin more or less steady at 5.8 percent. According to preliminary data from Fiat, revenue rose about 14 percent to 1.21 billion euros.

"This year will be more or less the same as last year. It will be a year to keep hold of what we've done rather than to expand," di Montezemolo said, adding that the bumpy global economy made the road ahead difficult.

While six-figure Ferraris are relatively immune from the ups-and-downs of the economy, more problems come from the fact that 50 percent of its speedy roadsters are sold in the United States. The recent devaluation of the dollar means U.S. sales are worth less in euro terms.

"The weakness of the dollar is obviously a critical element and we're feeling that," said di Montezemolo, without specifying the foreign exchange hit. He said Ferrari-Maserati should expand into Russia and China next year.

Ferrari also relies on the United States for 40 percent of sales of its Maserati marque, which returned to the US market in 2001 and sold 900 units there last year.

"We were moderately satisfied (with our US performance) last year but in the first months of 2003 we are feeling the effect of the international crisis," Maserati Chief Executive Antonello Perricone told Reuters separately.