Follow-Up Questions for Case #10 “The Grey Ferrari”
Gary Roberts, a Costa Mesa, California, importer stated: “Ferrari’s control freaks ought to cooperate with importers and let the free market take care of itself.” Comment.
Answer: Gary Roberts makes a bold statement when accusing Ferrari as being, “control freaks.” He believes that Ferrari is attempting to control demand by halting gray imports into the United States. With gray imports, American buyers are able to gain 30 - 40% in savings on Ferraris, as a result of the stronger dollar at the time. Buyers must receive the car through a registered importer that converts the cars to satisfy American safety standards for a fee. Ferrari alleges that gray imports have no impact on authorized dealers’ profits and that actions taken are really to protect the company’s reputation. Since the majority of Ferrari’s success is due merely to its legendary reputation for race cars, I see Ferrari’s reaction as logical and truly their best option at the time.
Does Ferrari’s case prove that requiring that products be delivered only through approved distribution channels ensures the highest quality for the customer?
Answer: Yes, Ferrari’s case proves that requiring that products be delivered only through approved distribution channels ensures the highest quality for the customer. When a customer goes through a registered importer they rely on that importers knowledge and skill of converting the automobile. In many cases Ferrari has found that importers stated that doors on all 550’s are identical, but doors on non-U.S. cars are not fitted with side-impact protection bars. A safety feature that a buyer of foreign race car would most likely want to take advantage of. Only by going straight through Ferrari and its approved distribution channels will the buyer be assured of its product’s quality.
Given its loss, what alternative actions are open to Ferrari?
Answer: They can begin working directly...
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