A spring in the step of the Prancing Horse

Ferrari goes from strength to strength

The UK may have entered a double dip recession but that doesn’t seem to have impeded the spring in the step of the Prancing Horse.

While the rest of us are counting the pennies and praying the motor gets through its next MoT, luxury car brand Ferrari goes from strength to strength.

Perhaps the super rich, put off philanthropy by the Government’s tax shenanigans, have decided to splash out on 200 grand sports cars instead.

Ferrari grew UK sales by 31 per cent in the first quarter of the year with 177 models delivered to customers. This performance outstripped encouraging results in other markets, which saw sales rise 16 per cent in the USA, 24 per cent in Germany and 23 per cent in the Middle East.

Overall, revenues were up 13 per cent to 556m Euro with net profit leaping 17 per cent to 42m Euro.

Ferrari said the success resulted from enthusiasm for the 12-cylinder FF, the continuing popularity of the 8-cylinder California, its top selling GT, and demand for the coupe and spider versions of the 458 sports car. Ferrari pointed out that the F12 Berlinetta, its most powerful ever model and the first in a new generation of V12s made no contribution to the first quarter results as deliveries do not start until the second half of the year.

In its native Italy however, the Fiat-owned marque suffered a downturn, selling 121 cars – a drop of 34 per cent compared to thefirst quarter of 2011.

Ferrari blamed this on the economic situation and "the local government’s recent financial initiatives". A clampdown on tax fraud coupled with a hike in car taxes have curbed the traditional Italian enthusiasm for high performance sports cars.

Ferrari has expanded its retail network in the UK with prestige car dealers JCT600 and HR Owen opening new showrooms this year.

James Dallas is deputy editor of What Van?

Photograph: Getty Images

James Dallas is deputy editor of What Van?

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BHS is Theresa May’s big chance to reform capitalism – she’d better take it

Almost everyone is disgusted by the tale of BHS. 

Back in 2013, Theresa May gave a speech that might yet prove significant. In it, she declared: “Believing in free markets doesn’t mean we believe that anything goes.”

Capitalism wasn’t perfect, she continued: 

“Where it’s manifestly failing, where it’s losing public support, where it’s not helping to provide opportunity for all, we have to reform it.”

Three years on and just days into her premiership, May has the chance to be a reformist, thanks to one hell of an example of failing capitalism – BHS. 

The report from the Work and Pensions select committee was damning. Philip Green, the business tycoon, bought BHS and took more out than he put in. In a difficult environment, and without new investment, it began to bleed money. Green’s prize became a liability, and by 2014 he was desperate to get rid of it. He found a willing buyer, Paul Sutton, but the buyer had previously been convicted of fraud. So he sold it to Sutton’s former driver instead, for a quid. Yes, you read that right. He sold it to a crook’s driver for a quid.

This might all sound like a ludicrous but entertaining deal, if it wasn’t for the thousands of hapless BHS workers involved. One year later, the business collapsed, along with their job prospects. Not only that, but Green’s lack of attention to the pension fund meant their dreams of a comfortable retirement were now in jeopardy. 

The report called BHS “the unacceptable face of capitalism”. It concluded: 

"The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. 

“The tragedy is that those who have lost out are the ordinary employees and pensioners.”

May appears to agree. Her spokeswoman told journalists the PM would “look carefully” at policies to tackle “corporate irresponsibility”. 

She should take the opportunity.

Attempts to reshape capitalism are almost always blunted in practice. Corporations can make threats of their own. Think of Google’s sweetheart tax deals, banks’ excessive pay. Each time politicians tried to clamp down, there were threats of moving overseas. If the economy weakens in response to Brexit, the power to call the shots should tip more towards these companies. 

But this time, there will be few defenders of the BHS approach.

Firstly, the report's revelations about corporate governance damage many well-known brands, which are tarnished by association. Financial services firms will be just as keen as the public to avoid another BHS. Simon Walker, director general of the Institute of Directors, said that the circumstances of the collapse of BHS were “a blight on the reputation of British business”.

Secondly, the pensions issue will not go away. Neglected by Green until it was too late, the £571m hole in the BHS pension finances is extreme. But Tom McPhail from pensions firm Hargreaves Lansdown has warned there are thousands of other defined benefit schemes struggling with deficits. In the light of BHS, May has an opportunity to take an otherwise dusty issue – protections for workplace pensions - and place it top of the agenda. 

Thirdly, the BHS scandal is wreathed in the kind of opaque company structures loathed by voters on the left and right alike. The report found the Green family used private, offshore companies to direct the flow of money away from BHS, which made it in turn hard to investigate. The report stated: “These arrangements were designed to reduce tax bills. They have also had the effect of reducing levels of corporate transparency.”

BHS may have failed as a company, but its demise has succeeded in uniting the left and right. Trade unionists want more protection for workers; City boys are worried about their reputation; patriots mourn the death of a proud British company. May has a mandate to clean up capitalism - she should seize it.