WEBVTT - Ferrari CEO Benedetto Vigna Talks China-EU EV Trade

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Well, the conversations that matter, the insights you need. This

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<v Speaker 2>is a pulse and I'm front Sain Lacua here in London. Now.

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<v Speaker 2>My next guest is in charge of one of the

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<v Speaker 2>world's most iconic companies. We're of course talking Ferrari, the

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<v Speaker 2>luxury carmaker famous for its roaring engine, has started a

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<v Speaker 2>shift to battery power. Now it's building a factory to

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<v Speaker 2>make hybrid and electric cars that we'll be ready next month,

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<v Speaker 2>with the first fully electric model expected late next year.

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<v Speaker 2>But Ferrari is still relying on its profitable combustion and

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<v Speaker 2>vehicles also to protect margins. Well, I am delighted, so

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<v Speaker 2>is the newsroom to be joined by Benettovina, the company's

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<v Speaker 2>chief executive, And to thank you so much. It's so

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<v Speaker 2>nice to catch up with you again. I think we

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<v Speaker 2>spoke a couple of months ago and leaders talk to

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<v Speaker 2>me a little bit about electrolification. So you weren't the

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<v Speaker 2>first one to jump on the spandwang and do you

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<v Speaker 2>have an advantage for having been a little bit more cautious.

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<v Speaker 3>But I think that you know actification of journey Ferrari

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<v Speaker 3>started a few years ago, it was the case of

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<v Speaker 3>Formula one, and it was the case of a supercar.

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<v Speaker 3>In twenty thirteen, it is the case of four hybrid

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<v Speaker 3>model actually six if I considered a special version. They

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<v Speaker 3>are having a tremendous truction on the on the market.

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<v Speaker 3>Just considering Q one, almost fifty percent of the cars

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<v Speaker 3>that we sold in Q one are hybrid. So electric

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<v Speaker 3>electric car is the next step in our road map.

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<v Speaker 1>But are you happy?

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<v Speaker 2>I think last time we spoke you were talking to

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<v Speaker 2>me about secret protocols and the secret.

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<v Speaker 4>I'm very happy, you're very very happy.

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<v Speaker 1>Give us a what are you most happy about?

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<v Speaker 3>But I think the car we are we are setting

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<v Speaker 3>up is a car that is unique in all the respect.

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<v Speaker 4>Let's put in this way.

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<v Speaker 3>Our electric car just goes beyond the basic electrons and

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<v Speaker 3>byte that everyone is talking about.

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<v Speaker 4>There is much more in a car. But you have

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<v Speaker 4>to wait till Q four next. I know.

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<v Speaker 1>But what is it? Are you replicating sound? Is it

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<v Speaker 1>the way dry?

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<v Speaker 3>We don't like to mimic what is typical of another world.

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<v Speaker 3>We are interpreting the technology in a unique way. Electric

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<v Speaker 3>engine is not silent. Electric engine can deliver some emotion

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<v Speaker 3>that usually in the mass market car that you have today,

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<v Speaker 3>you don't find it. So it's up to us to

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<v Speaker 3>interpret this technology in a unique way, to make something unique.

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<v Speaker 2>So has it exceeded your expectation? And do you think

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<v Speaker 2>that will translate into sales.

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<v Speaker 3>It's on the way there, it's on the way to exceed.

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<v Speaker 3>We still have some time. We are on the right track.

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<v Speaker 3>I'm satisfied where we are. You know, the final judgment

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<v Speaker 3>is the client. The client is the most important asset

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<v Speaker 3>for a company because also they are the final judgment.

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<v Speaker 4>I think the client will will have well, look at

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<v Speaker 4>we'll like it.

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<v Speaker 1>But we see you already have orders.

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<v Speaker 3>Now we don't take orders. We take orders. We take

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<v Speaker 3>orders only when we launch it. It's the same story of

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<v Speaker 3>the dot digitial in there we announced a few days ago.

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<v Speaker 2>But give me a sense that there there's not this

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<v Speaker 2>war basically on evs between China and the US and

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<v Speaker 2>Europe is also in the middle. What does that mean

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<v Speaker 2>for the electrification of cars in general?

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<v Speaker 3>Look, I don't maybe, yes there is. People are defining

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<v Speaker 3>it as a war. I think for me is a

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<v Speaker 3>nice competition.

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<v Speaker 4>For me. This is a call to action for Europe.

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<v Speaker 4>It's a call to action.

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<v Speaker 3>To become more I can I say pushy, less complacent

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<v Speaker 3>and if some I've been in my life, I've been

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<v Speaker 3>always thought that if someone is faster than you, better,

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<v Speaker 3>you are faster than them. And if you want this

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<v Speaker 3>is also what we are doing in formula one that

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<v Speaker 3>I mean in racing, that's what you have to do.

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<v Speaker 3>If someone is faster, be faster than them, don't try

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<v Speaker 3>to stop them.

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<v Speaker 4>Faster and better and better?

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<v Speaker 2>Yeah, sure, because if you're not, I mean, if you're

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<v Speaker 2>not better, then it's tough.

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<v Speaker 3>Right.

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<v Speaker 1>Does Europe you think have an actual advantage in.

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<v Speaker 3>This faster I mean in any action to let product innovation,

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<v Speaker 3>call it customer even seeing call it cost leadership. When

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<v Speaker 3>I say faster to visualize on a track, but in

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<v Speaker 3>all the directions that make unique a company, in all

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<v Speaker 3>the directions that if you want to the pillar of

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<v Speaker 3>a system, a bit of a company.

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<v Speaker 2>But you're dealing in supercars, right, I mean, this is

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<v Speaker 2>like the top of the top of the town. If

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<v Speaker 2>people buy less electric cars at the kind of base level,

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<v Speaker 2>does it make a difference to the attractiveness of your cars?

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<v Speaker 3>I don't think so. I don't think so. I think

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<v Speaker 3>that for a company like ours. It's important that we

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<v Speaker 3>take the three colors, the red, the blue, and the green,

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<v Speaker 3>and we show the client that we can harness them

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<v Speaker 3>in a unique way in the river unique emotion. I

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<v Speaker 3>think that we don't sell allow me to see technologies.

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<v Speaker 3>We sell emotions and then technology a way to deliver

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<v Speaker 3>unique emotion to our client.

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<v Speaker 2>I mean, of course, this is what you know. Luxury

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<v Speaker 2>companies sell motions, the desirability. But what kind of client

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<v Speaker 2>do you think is attracted to the electric for ari.

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<v Speaker 3>I think that we will have three kinds of clients.

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<v Speaker 3>We will have traditional client, some existing ion ferrari that

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<v Speaker 3>will not take electric cars. Then we will take client

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<v Speaker 3>existing client that will say, you know what, I will

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<v Speaker 3>take also electric like I took ibrid and I see.

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<v Speaker 3>And then there are clients to whom I already talked

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<v Speaker 3>that are saying, you know, I will be part of

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<v Speaker 3>your community, of your family, even only if you will

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<v Speaker 3>be able to offer me an electric car. I think

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<v Speaker 3>these are the three kind of clients that I'm sure

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<v Speaker 3>we'll find in the future.

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<v Speaker 1>But I mean it's the last one harder to find.

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<v Speaker 3>I have to say that I have already met tens

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<v Speaker 3>of those people that are waiting for our green car.

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<v Speaker 4>Allow me to call in this.

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<v Speaker 2>Way younger clients or does it or is it more

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<v Speaker 2>bi regions.

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<v Speaker 3>Let's say I would say, yeah, maybe younger than fifty. Yeah,

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<v Speaker 3>but there are some people in mind between fifteen and

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<v Speaker 3>sixty that are willing to take this kind of car.

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<v Speaker 2>But talk me about so I see what goes you know,

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<v Speaker 2>what kind of models are you working on?

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<v Speaker 1>What happens to that for like ten years?

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<v Speaker 4>What I would like to do amongst friends? Yeahah, yeah,

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<v Speaker 4>I'm sure. I mean to have this kind of question.

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<v Speaker 3>We keep going with the plan we share with Captain

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<v Speaker 3>market day two years ago we said that we'll keep

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<v Speaker 3>going with the twelve cylinder. We have the eight cylinder thermal,

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<v Speaker 3>and then we have the six and d eate cylinder library,

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<v Speaker 3>and then we're adding this platform. I think it's important

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<v Speaker 3>for a company like ours to go ahead with this

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<v Speaker 3>platform and to look at the car just I mean,

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<v Speaker 3>beyond electrification, digitalization, there are many other things you can

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<v Speaker 3>do in a car, and that's what you're doing cent

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<v Speaker 3>ten years.

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<v Speaker 2>How many comings do you already have an idea? Or

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<v Speaker 2>is ten years too far away?

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<v Speaker 4>A little bit far away? Five years?

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<v Speaker 3>What I would like to say that you prefer quality

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<v Speaker 3>of our revenues and our P and L to quantity.

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<v Speaker 4>Let's messa in this way.

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<v Speaker 1>Fair.

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<v Speaker 2>But when you look around the world, you know, we

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<v Speaker 2>talk about inflation. That's not something that touches a lot

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<v Speaker 2>of your customers. We talk about those words about geopolitics.

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<v Speaker 2>Does it impact the demand or does it make the

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<v Speaker 2>cars more desirable?

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<v Speaker 3>We don't see. We did not see any impact on this.

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<v Speaker 3>I think we have to be watchful. We have to

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<v Speaker 3>keep always to be watchful to make sure that we

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<v Speaker 3>are on track.

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<v Speaker 4>As so now we don't see an impact.

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<v Speaker 3>Clear we are to manage some increase in price and

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<v Speaker 3>cost of energy and material. We are working on that.

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<v Speaker 3>But it's the beauty of the life, you know. We

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<v Speaker 3>have to cope with this situation that you don't know.

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<v Speaker 3>If you know everything, it's not fun.

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<v Speaker 4>It's not fun.

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<v Speaker 1>What do you worry about the most?

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<v Speaker 3>I think that what is important for us is that

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<v Speaker 3>one point we are a successful company, a successful team.

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<v Speaker 3>We need to make sure that we are always with

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<v Speaker 3>four wheels on the ground. We have always to listen

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<v Speaker 3>the week signal from the external world. We have to

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<v Speaker 3>care really about the sustainability like we are doing, and

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<v Speaker 3>then we don't have to teach.

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<v Speaker 4>We have to learn.

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<v Speaker 3>I think this is very important because when you are

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<v Speaker 3>in a successful team, you may lose the compass. You

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<v Speaker 3>may start to believe that whatever you do you will

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<v Speaker 3>be successful, and this is not good.

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<v Speaker 4>We have to be four wheks.

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<v Speaker 2>On the ground, humble. I like that for wheals in

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<v Speaker 2>the ground. How do you deal with the China strategy?

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<v Speaker 2>How do you China? How do you deal with China?

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<v Speaker 3>For us is we said two years ago China overall

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<v Speaker 3>China one on Kong, I mean greater China will not

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<v Speaker 3>go beyond ten percent of our sales.

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<v Speaker 4>Why for the caboraries.

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<v Speaker 3>One is because the market in China is still not mature.

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<v Speaker 4>We need to give time to mature.

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<v Speaker 3>And the second because it's a little bit decreative on

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<v Speaker 3>the margin side for the profit and loss. But really

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<v Speaker 3>we need for each country we need to give the

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<v Speaker 3>time to mature. There are other countries sour so that

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<v Speaker 3>are showing good, good growth, and also there we have

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<v Speaker 3>to proceed in the right way.

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<v Speaker 2>I mean, the China template could be a little bit

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<v Speaker 2>different to other markets. Right, because there's a crackdown on

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<v Speaker 2>some luxurious you know brands. So again, how do you

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<v Speaker 2>see that evolving? Is it like a stop and start?

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<v Speaker 3>I would like to say in this way, China is

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<v Speaker 3>not for Ferrari what it is for other luxury brands.

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<v Speaker 3>In other cases, you have exposure that is more than

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<v Speaker 3>twenty percent. In our case it is less than ten percent.

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<v Speaker 3>It will stay less than ten percent for the reason

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<v Speaker 3>I told you. For sure, we have also people from

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<v Speaker 3>that nationality buying outside. But I think they said there

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<v Speaker 3>are a couple of things I'm particularly proud of the

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<v Speaker 3>last capital market day. One is to keep China built

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<v Speaker 3>ten percent in two, to keep going with the three

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<v Speaker 3>colors in our product strategy formula one.

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<v Speaker 1>This weekend Monaco, this is the big one.

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<v Speaker 2>Are you worried about the red bull gap getting a

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<v Speaker 2>little bit smaller?

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<v Speaker 3>But I think that this year we are in a

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<v Speaker 3>better situation than one year ago, because if I see

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<v Speaker 3>the last seven races, we took seven podium. In one

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<v Speaker 3>case we took two, in other case we took zero,

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<v Speaker 3>but we took seven podium. We cut the distance between

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<v Speaker 3>us and the first one and by factor three versus

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<v Speaker 3>last year. So I think the team is doing decent process.

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<v Speaker 3>We are on the on the right track.

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<v Speaker 1>So you're confidence for Scuda.

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<v Speaker 3>I think there are there have been substantial progresses. We

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<v Speaker 3>have to keep improving like we like. We have to

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<v Speaker 3>keep improving in every window. I mean, this is the

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<v Speaker 3>beauty of life.

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<v Speaker 2>This isn't This is a nice philosophy, full stop. Benedetto,

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<v Speaker 2>as always, thank you so much for joining us. That

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<v Speaker 2>was Benedetto Vina, the chief executive of Ferrari