Ferrari, Rolex, and the Risks of Gatekeeping
Ferrari and Rolex carry just about as much cachet as any brand can, and given their histories, it’s easy to understand why. But the two revered luxury brands have made some choices that have come back to haunt them, and will probably to continue do so. Let me explain.
For context, I own a Rolex and a Ferrari. (OK, Boomer, you’re fancy, we get it.) The Rolex I bought in 1981, and I wear it almost every day. I bought the Ferrari in 2017, a 2005 model. I use it like most “modern” Ferrari owners, which is to say, not much. I love these brands and the incredible machinery they’ve created over the years, but their gatekeeping strategies are becoming a turn-off, and I don’t think I’m the only one who feels that way.
Try buying a new Rolex watch. That lovely display at the authorized dealer is empty. Why? Because there are no new watches available in the system. They have been sold by authorized dealers to “favored customers,” almost all of whom are not end users but friends, influencers, celebrities, used watch dealers or flippers. There is nothing on the store shelves, but conveniently, a quick look at online, non-authorized retailers reveals a much different story. Fresh 2024 watches are for sale at a markup over their retail price. Who benefits? Rolex, their retailers, and a small group of connected individuals. The losers? The rest of the world who would like to buy a new Rolex at retail.
So what happens? Those rejected buyers buy something else or go without. The bitter feeling of being rejected by a brand might not resonate at first, but it lingers. That lingering feeling can cause resentment. And that resentment sends qualified buyers to other stores. Rolex, a Boomer “must-have,” has become a Gen X reject, a Millennial inside joke, and a Gen Z “I’m never going to afford a house, so I’ll rent one for my next Tik Tok” prop.
Is it just me, or am I the only one who thinks that paying the favored client, the brother of the watch retailer’s owner, or the flipper a $5,000 to $10,000 ransom (or 100 Timex watches at $100?) for what is a two-month-old but now “used” watch is the height of arrogance, or perhaps stupidity? Is Rolex leveraging its future in an era when hundreds of new watch brands and thousands of new watch models appear every year?
Rolex has a sister brand, Tudor, which is where they are now placing their innovative and lesser-priced timepieces. However, Tudor as a brand is less aspirational than Rolex. Rolex makes it perfectly clear that they are not the same as a Tudor, and Tudor reciprocates. But I must wonder, does the lack of a new Rolex drive buyers to other brands? I think it does. That Patek Phillipe, Blancpain, Chopard, IWC, or Audemars Piguet might have flown under the radar unnoticed if not for a potential owner leaving the Rolex store empty-handed.
On to Ferrari. It is one of the best-known of all brands not just in the U.S., but in the world. If you don’t have the means or access to a genuine Ferrari car, you can get genuine (or licensed) Ferrari hats, key chains, license plate frames, scale models, shirts, socks, jackets, posters, model cars, and hundreds more trinkets, and thousands more if you count the unlicensed rip-offs.
Just to be clear, you can walk into a Ferrari dealer and buy a new Ferrari, should you have the coin or credit. But there is a treasure trove of new Ferraris you can’t have, that is until you have worked your way up the sales ladder, or are a favored client, aka a popstar, an influencer, or a celebrity. Again, mere mortal’s money is not good enough, you have to buy car A, B, C and possibly D and E before you can get the coveted F, G, or H. Maybe I’m a luddite, but I just don’t get it. Call it brand management, or call it savvy marketing if you follow the company line. I don’t agree.
I’ll call it something else. This extreme “hide the good stuff” philosophy has—I believe—helped fuel the unprecedented growth of rival brand McLaren. That’s a good thing for the marketplace, as competition breeds innovation. McLaren Cars (Now McLaren Automotive) introduced its first production car in 1992—the now legendary F1. After an extended period of dormancy, they have more than hit the ground running with a plethora of new models since 2010.
Now, let’s talk Lamborghini. In my opinion, the Lamborghini brand is in ascendancy. They, like McLaren, are seemingly everywhere you find high-value sports cars, be it on track, on the street, or at cars and coffee or concours lawns.
Has Ferrari’s brand management helped create the opportunity for the growth of other brands? Is it just me, or have a good percentage of the car guy Cool Kids (particularly the younger ones) jumped from the Prancing Horse to the Snorting Bull or to McLaren?
I will concede that my observations are mostly, well, observational. I can tell you that on the Monterey peninsula in August, I saw groups of Lamborghinis and McLarens out in force on group drives. Ferrari? Some, but not as much. Perhaps the collectors are buying Ferraris while the drivers are getting McLarens and Lamborghinis.
Maybe I saying the quiet part out loud, or maybe I am off base. They were always exclusive brands, but based on what I see, I have to ask the question: Does the emerging hyper-exclusivity of Rolex and Ferrari, two great, storied, aspirational brands, mean that they have sold their future at the expense of the present?
At my current age of 47 I have no interest in Ferrari any more. I feel Aston is out doing them and I can still get a manual. I just got in from taking my daughter out for a ride in my 1958 Austin Healey Sprite, we stopped in a small town to look at a few things. There were two Lamborghinis , one McLaren and a few Corvettes of different ages. Funny when we came back the little yellow Sprite drew a larger crowd than all these higher dollar less engaging cars. I do agree with the author that both Rolex and Ferrari are somewhat missing the plot. In the future they’ll be less people (kids now) that are going to look at them like I did as a child.
That being said, at the moment Rolex and Ferrari do a great job at making you feel special and or accomplished.
Along these lines, I changed (several years ago) from telling my kids my dream car was a Ferrari to a Lambo
I admire & agree with Jay Leno’s views on Ferrari.
I don’t know his take on Fancy Dude watches, but see above for mine.
was wondering when someone would mention Mr Leno’s thoughts on Ferrari ?? Thank you
To quote a Shark Tank “celebrity” cast member: “Those who WANT to be somebody buy a Ferrari, Those who ARE somebody drive a Lamborghini.”
Someone wrote in my High School yearbook ” a rich man drives a Cadillac, a poor man drives a Ford, you’ll drive a jackass, and crank it with a board.”
I gave my Rolex to my son, because he wanted it and the darn thing NEVER had the accurate time.
My Citizen watch is accurate, and I don’t crank my F-150 with a board.
Making things exclusive is nothing new. I think it strokes the egos of some but to me I have no care. I don’t get excited about new Ferraris. I’m more interested in the old “analog” Ferraris. They can do whatever they want because if I was in the market the new stuff does not capture my attention. Having been to a few car shows I tend to find the younger exotic owners who just want to show off are more of a turn off. They know little to nothing about their cars and just want to get some attention. Now bring an F40 or a 288 GTO and I’m interested.
Watches are machines and as such they like to be run. Leaving an automatic sit dormant is not good for it and may cause it to loose time. I’ve bought a number that have been left in a drawer at yard sales etc. You’d be surprised at how many times I’ve heard ‘ I think it just needs a battery’ . Usually they can be brought back to speed by a good watch repairman at a reasonable cost. Since Bob mentioned giving his watch to his son I have a tendency to give bonus points to women wearing their fathers or grandfathers old watch. A certain.. something to that.
As a marketing guy, the thing that interests me about the Ferrari example is that management has made a conscious decision to elevate exclusivity and restrict availability across the entire brand; not just its limited-production offerings. For example, the MSRP of a 1979 308 (using round numbers) was approx. 2.5x the average American salary at the time. In 2024, the MSRP of Ferrari’s 296 is approx 5.5x the average American salary (if you consider the Roma a more appropriate comparison, its MSRP is still more than 4x today’s average American annual salary).
Interestingly, run the same comparison on a base model Corvette and a dramatically different picture emerges (I won’t bore you with the numbers).
I love Ferrari’s and have a 308 that I cherish and aspired to as a 20-something college kid; not because it was a status symbol, but because of its beauty and Ferrari’s racing heritage and the fact that I was (and still am) a “mid-engine guy” owning 2 X1/9s and a Lancia Scorpion on my way to 308 ownership.
Sadly, I’ll never own a new Ferrari (cost isn’t the only reason; I’m not a fan of the company’s Draconian interpretation and enforcement of its “brand standards), but had Ferrari maintained it’s pricing relative to inflation, I could definitely see myself as a regular customer for Certified Pre-Owned inventory.
Maybe the beauty and racing exploits still inspire people to buy Ferraris today, Ferrari have sadly made it so that fewer can realize their dream.
I call “bullshit!!” Only rookies and wannabes go for this racket. I wear a Timax, keeps on tickin, and drive a Tiger.
No prob with either!
Triumph spitfire / 66 Mustang GT / 70 Couger convertible, 70 Pontiac G.P. / 70 Chevelle Malibu 307 / 73 Old 98 / 80’s 98 couple several own / Cutlass Brougham / 64 Merc Monterey Breezeway etc, I had these & more + enjoy driving them, I’m fine w/ Citizen / Seiko divers. I did buy a new Tag a few years ago since I can’t buy a Rolex Sub – not having nightmare sleep over that. but if I get a chance bump into a used Ferrari 308 GTBI from 80’s I’ll take that but not the newer ones.
Ferrari has been at this sales strategy for a long time.. In 05 I wanted a 360 Spider.. Made out a spec sheet with option codes and listed prices.. Over 6 months time, went to three well known (Fla, Tx, NC) Ferrari dealers with the spec sheet and a check for list price of $256K … at all three dealers, the SM pushed the check back across the table telling me that I wasn’t a “Friend” of the dealership.. I replied, “I’m trying to be”… Ferrari exists in a luxury bubble that most of us only read about. Now Porsche has joined the party.. Try to walk in a dealer with a check in hand and get an allocation for a GT3 variant…Speaking of McLaren..walked up to a dealership in NC and they would not allow me to enter the showroom w/o a salesrep appointment… Sales arrogance will never get a dollar of mine…
While I’m not a Rolex hater , there are some especially older models that I like , I would probably opt for a TAG ( Techniques d’ Avante Garde ) Heuer chronograph over a Daytona. While I don’t care for the Monaco the Carrera is a nice piece. Oddly enough they showed Ford V Ferrari last night. Shelby ( Damon ) is wearing a Carrera. White face, black dials at 3 and 9. The one I’d choose. But, for those who look for historic inaccuracies, that version didn’t appear until some years later. I suspect they used a 50th anniversary reissue. Still, while ” I am not a crook ” I’d probably have been tempted to ‘accidentally’ walked off set wearing it, rather than leave it sit in the wardrobe department.
Rolex’s strategy is backfiring, and they’ve probably realized this with making a concerted effort to increase production with the new factory in Switzerland. And with the Rolex taking control of the used market indicates that Rolex intends to clean up the flipping of their watches. What they could not foresee is the pejorative publicity with the brand being associated with less than savory of society. At RRP, Rolex is fairly priced compared it’s piers like Omega, Breitling.
Even Rolex does not play in the league of Patek, AP, Jaeger, Vacheron.
It doesn’t have the class of Cartier.
If money were no object, I’d opt for A Lange Sohne.
Ferrari is not a car – it’s a luxury brand and who cares what they charge, few will ever be able to afford one anyway, whereas anyone can get a Rolex at RRP.
I’ve worn the same Rolex watch every day for the past 51 years, it’s my watch, tells me the time, don’t give a rats’ ass who is or isn’t impressed by it. I buy cars that I like to drive, I don’t care who likes or doesn’t like my choice. If your self worth is tied up in your car or watch, it might be time to get a life.
I’ve had Ferrari and Rolex. Still love the style of both. Made money when I sold all of them. As for Ferrari, in the words of Dick Merritt, I can’t afford any one I’d want to drive. Daytona specifically. And as for Rolex, quality is not what it was and service costs – certainly for the rich. I still love mechanical watches though and the Rolex styles still appeal to me. That’s where Pagani Design comes in. Call them homages, tributes, knockoffs, whatever. They look great and they work at 0.7% the cost of a Rolex. They look good to me and that’s all that matters.
Reminds me of 1969 when I had just bought my Boss 302 and wanted a tape deck for it. Walked into the sound shop and saw a sign taped to the glass display case that said “Ain’t it funny how people spend money they don’t really have to buy things they don’t really need to impress people they don’t really like”. Guess who walked our empty handed?