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1、FERRARI N.V.2023 ANNUAL REPORT AND FORM 20-F1FERRARI N.V.2023 ANNUAL REPORT AND FORM 20-F2FINANCIAL STATEMENTSFERRARI N.V.2023 ANNUAL REPORT AND FORM 20-F3FERRARI N.V.2023 ANNUAL REPORT AND FORM 20-FFINANCIAL STATEMENTS4TABLE OF CONTENTSBoard ReportBoard of Directors Independent Registered Public Ac

2、counting Firm Letter from the Chairman and the Chief Executive Officer Introduction Certain Defined Terms and Note on Presentation Forward-Looking Statements Creating Value for Our Shareholders Risk Factors Overview Industry Overview Overview of Our Business Financial Overview Results of OperationsL

3、iquidity and Capital Resources2024 Outlook Major Shareholders Corporate GovernanceReport of the Non-Executive Directors Non Financial Statement Ferrari GroupDouble Materiality Analysis and Stakeholder EngagementProactively Fostering Best Practice GovernanceExceeding ExpectationsBeing the Employer of

4、 Choice09121214181819202146485192100108120120122164171174176184194198TABLE OF CONTENTS5Reducing Our Environmental FootprintCreating and Sharing Value with the CommunityRisk Management Process and Internal Control Systems Remuneration of Directors Controls and ProceduresStatement by the Board of Dire

5、ctorsFinancial StatementsConsolidated Financial Statements at and for the year ended December 31,2023 Consolidated Income Statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Cash Flows Consolidated Statement of Changes in Eq

6、uity Notes to the Consolidated Financial StatementsCompany Financial Statements at and for the year ended December 31,2023 Income Statement/Statement of Comprehensive Income Statement of Financial Position Statement of Cash Flows Statement of Changes in Equity Notes to the Company Financial Statemen

7、tsOther Information Additional Information for Netherlands Corporate GovernanceAdditional InformationForm 20-F Cross ReferenceNotes2162462662793043073093113123133143153173183853863873883893904174184194534616FINANCIAL STATEMENTSFERRARI N.V.2023 ANNUAL REPORT AND FORM 20-F7FERRARI N.V.2023 ANNUAL REPO

8、RT AND FORM 20-FFINANCIAL STATEMENTS00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ips

9、um00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum9BOARDREPORTPART I00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum

10、00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum00 Lorem Ipsum11BOAR

11、D REPORTINDEX12 Board of Directors 12 Independent Registered Public Accounting Firm 14 Letter from the Chairman and the Chief Executive Officer 18 Introduction 18 Certain Defined Terms and Note on Presentation 19 Forward-Looking Statements 20 Creating Value for Our Shareholders 21 Risk Factors 46 Ov

12、erview 48 Industry Overview 51 Overview of Our Business 92 Financial Overview 100 Results of Operations108 Liquidity and Capital Resources120 2024 Outlook 120 Major Shareholders 122 Corporate Governance164 Report of the Non-Executive Directors266 Risk Management Process and Internal Control Systems

13、279 Remuneration of Directors 304 Controls and Procedures307 Statement by the Board of Directors12BOARD REPORTFERRARI N.V.2023 ANNUAL REPORT AND FORM 20-FBOARD OF DIRECTORSExecutive Chairman John ElkannChief Executive OfficerBenedetto VignaVice ChairmanPiero FerrariDirectorsDelphine ArnaultFrancesca

14、 BellettiniEddy CueSergio DucaJohn GalanticMaria Patrizia GriecoAdam KeswickMike VolpiINDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMDeloitte Accountants B.V.(AFM Annual Report filing(*)Deloitte&Touche S.p.A.(Form 20-F filing)(*)(*)Refer to“IntroductionAbout this Report”for additional information rela

15、ting to the AFM Annual Report filing and the Form 20-F filing.FERRARI N.V.2023 ANNUAL REPORT AND FORM 20-F13BOARD REPORT14BOARD REPORTFERRARI N.V.2023 ANNUAL REPORT AND FORM 20-FLETTER FROM THE CHAIRMAN AND THE CHIEF EXECUTIVE OFFICERDear Shareholders,We are pleased to report that 2023 has been anot

16、her year of growth and achievement for Ferrari.This is reflected in the record values evinced by all financial indica-tors.For the first time,our net profit,up 34%,exceeded 1 billion Euro and the annual EBITDA margin rose to 38.2%.And,as we grow and evolve,we will continue to stay true to our unique

17、 approach we are committed to preserving our brands exclusivity and maintaining its positioning in ab-solute luxury.To begin with racing,Ferraris victory at Le Mans in June will remain etched on all our memories for years to come.It was a special result for many reasons it saw our return to the top

18、class of the World Endurance Championship for the first time in five decades,and it took place on the centenary of this legendary 24-hour race.Perhaps,the most gratifying aspect of the Ferrari 499Ps win is that it was a true team effort every area of our company worked together seam-lessly to contri

19、bute to our success.Of course our drivers,technicians and engineers deserve huge credit,but Sports cars and Lifestyle also played their part in making this an even richer,more unique experience.There were promising signs for Scuderia Ferrari too,even though the last Formula 1 season was a difficult

20、one,often short on satisfaction.We are working tirelessly to return to the competitive level that our tifosi rightly expect of us.Everything we do at Ferrari is driven by a continuous will to progress and the new models which we launched in 2023 truly exemplify this ethos.The Roma Spider,the SF90 XX

21、 Stradale and the SF90 XX Spider each raise the bar of technology and design still further,to meet and ex-ceed our clients desires in line with our plan.This extends to our most passionate racing clientele too:last October,during Finali Mondiali at the Mugello Circuit,we unveiled the 296 Challenge a

22、nd the 499P Modificata,both of which will set new benchmarks in track driving thrills.Our Ferrari community is bonded by a unique sense of belonging,which we nurture through memorable events such as Finali Mondiali and our Cavalcades,this year taking our clients to Rome,Tuscany and Mo-rocco.Then the

23、re was the unforgettable Ferrari Gala,held in New York last October an exclusive opportunity to celebrate the special bond be-tween Ferrari and the United States.In an increasingly digital world,there is still little to match the power of living and sharing experiences together.While we continue to

24、evolve,we stay true to our heritage,as shown by the progress of our lifestyle dimension.One of Ferraris principal brand values is of tradition and innovation the ability to combine rev-FERRARI N.V.2023 ANNUAL REPORT AND FORM 20-F15BOARD REPORTolutionary technological solutions with exceptional craft

25、smanship.Our latest collections,presented during the Milan Fashion Weeks,demon-strated our potential in this field.Our lifestyle activities are key to build-ing a stronger bond with fans,as shown by the record popularity of our museums,which last year saw over 700,000 visits.In parallel,our col-labo

26、rations with carefully selected partners have led to the creation of many exclusive and desirable products.One common factor underlies the success of each of our brands souls the people of Ferrari.They are our greatest strength,and are at the heart of our companys initiatives.To enable our people to

27、 continue to grow and innovate,we support them in many different ways.In 2023,we became the first company in the luxury sector to achieve Equal-Salary Certification on a global level.Plus,we have provided our staff with more than 135,000 hours of training over the year.There is also the renewal of t

28、he Competitiveness Award Agree-ment,and our initiatives aimed at employee well-being,which pay extra attention to health and work-life balance.Last but not least,we were de-lighted to introduce a broad-based share ownership plan for our approxi-mately 5,000 employees,reinvigorating their involvement

29、 in company life and inspiring the sense of belonging that makes our organisation unique.These initiatives reflect the value we place on our people and ac-knowledge their boundless ability to innovate,one of the key factors that will help us attain our goal of becoming carbon neutral by 2030.This is

30、 a priority objective which we will reach by taking concrete and measur-able steps via a scientific and holistic approach and by listening to our peoples ideas.Last year they submitted hundreds of valuable proposals for improvement to make our work processes even more efficient,near-ly 400 of which

31、focused on reducing our carbon footprint.In 2023,thanks to some of these suggestions,we were able to reduce the direct emissions by 7%in the year,and we built our first prototype engine from recycled aluminum.We also installed solar panels providing an extra 2.4 megawatts peak(MWp)in capacity compar

32、ed to last year.An additional 1 MWp will become available in the coming months for the Renewable Energy Community the first ever energy community in Italy to be backed by an industrial company for the benefit of its local area.In Maranello,the transformation and expansion of our facilities con-tinue

33、s apace,across an area of about 100,000 square meters.Construc-tion of the e-building,where we will also make the electric cars of the fu-ture,is on schedule.As we expand,our historic links with our local area grow ever stronger.At the heart of this relationship is our commitment to education a caus

34、e that was dear to our founder.We remain convinced that education is the most effective way to ensure a promising future for the younger generation.We confirmed our support for education by adding the proceeds from the New York Galas charity auction,allowing us to focus even more on local projects w

35、ith global ambitions.This is just one example of the ac-tive role Ferrari intends to play in the years to come.Everything we have achieved in 2023 is thanks to the invaluable support of you,our shareholders.Together,we will pursue continuous learning and improvement,providing impactful answers and c

36、oncrete solutions not only for Ferrari and the automotive world,but for our community as a whole.February 22,2024John ElkannExecutive ChairmanBenedetto VignaChief Executive Officer16BOARD REPORTFERRARI N.V.2023 ANNUAL REPORT AND FORM 20-FFERRARI N.V.2023 ANNUAL REPORT AND FORM 20-F17BOARD REPORT18BO

37、ARD REPORTFERRARI N.V.2023 ANNUAL REPORT AND FORM 20-FINTRODUCTIONABOUT THIS REPORTThis document,referred to hereafter as the“Annu-al Report and Form 20-F”or“Annual Report”,consti-tutes both the statutory annual report in accordance with Dutch legal requirements(“AFM Annual Report”)and the annual re

38、port on Form 20-F(“Form 20-F”),ap-plicable to Foreign Private Issuers,pursuant to Sec-tion 13 or 15(d)of the United States(“U.S.”)Securities Exchange Act of 1934,for Ferrari N.V.for the year ended December 31,2023,except as noted below.For the cross-references of the content of this document to the

39、Form 20-F requirements please refer to the“Form 20-F Cross Reference”section in-cluded elsewhere in this document.This Annual Report is filed with the Netherlands Authority for Financial Markets(Autoriteit Financile Markten,the“AFM”).The following sections have been removed for our Annual Report fil

40、ing with the AFM:Form 20-F cover page;Corporate Governance Differences between Dutch Corporate Governance Practices and NYSE Listing Standards;Report of Independent Registered Public Ac-counting Firm in respect of Internal Control over Financial Reporting for the SEC filing;Report of Independent Reg

41、istered Public Ac-counting Firm in respect of the PCAOB audits of the 2023 financial statements for the SEC filing;Exhibits;and Signatures.This Annual Report and the exhibits hereto are filed with the U.S.Securities and Exchange Commission(“SEC”)and unless otherwise stated,all references in this doc

42、ument to“Form 20-F”refer to the SEC fil-ing.The following sections have been removed for our Form 20-F filing with the SEC:Letter from the Chairman and the Chief Execu-tive Officer;Overview of Our Business Procurement Re-sponsible Supply Chain;Overview of Our Business Procurement Conflict minerals;O

43、verview of Our Business Client Relations Client Satisfaction;2024 Outlook;Corporate Governance Disclosures pursuant to Decree Article 10 EU-Directive on Takeovers;Corporate Governance Responsibilities in re-spect to the Annual Report;Non Financial Statement;Controls and procedures Statement by the B

44、oard of Directors;Company Financial Statements;Other Information Additional Information for Netherlands Corporate Governance;and Independent auditors report Report on the audit of the financial statements 2023 included in the Annual Report in respect of the AFM filing.DOCUMENTS ON DISPLAYThe SEC mai

45、ntains an internet site that contains re-ports,proxy and information statements,and other information regarding issuers that file electronically with the SEC,including the Company,at http:/www.sec.gov.The address of the SECs website is provided solely for information purposes and is not intended to

46、be an active link.Reports and other information con-cerning the business of Ferrari may also be inspect-ed at the offices of the New York Stock Exchange,11 Wall Street,New York,NY 10005,United States.We also make our periodic reports as well as other information filed with or furnished to the SEC av

47、ailable,free of charge,through our website at https:/ as soon as reasonably practicable after those reports and other information are electronically filed with or fur-nished to the SEC.The information on our website or the websites of any other entity is not incorporated by reference in this documen

48、t.This document is a PDF copy of the Annual Re-port of Ferrari N.V.at and for the year ended Decem-ber 31,2023 and is not presented in the ESEF-format as specified in the Regulatory Technical Standards on ESEF(Delegated Regulation(EU)2019/815).The official Annual Report of Ferrari N.V.in ESEF single

49、 reporting package,as filed with the AFM,is available on Ferraris website.CERTAIN DEFINED TERMS AND NOTE ON PRESENTATIONCERTAIN DEFINED TERMSIn this report,unless otherwise specified,the terms“we”,“our”,“us”,the“Group”,the“Company”and“Fer-rari”refer to Ferrari N.V.,individually or together with its

50、subsidiaries as the context may require.Ref-erences to“Ferrari N.V.”refer to the registrant.NOTE ON PRESENTATIONThis Annual Report includes the consolidated fi-nancial statements of Ferrari N.V.at December 31,2023 and 2022,and for the years ended December 31,2023,2022 and 2021 prepared in accordance

51、 with International Financial Reporting Standards(“IFRS”)as issued by the International Accounting Standards Board(“IASB”),as well as IFRS as ad-opted by the European Union.There is no effect on these consolidated financial statements resulting from differences between IFRS as issued by the IASB and

52、 IFRS as adopted by the European Union.The consolidated financial statements and the notes to the consolidated financial statements are FERRARI N.V.2023 ANNUAL REPORT AND FORM 20-F19BOARD REPORTreferred to collectively as the“Consolidated Finan-cial Statements”.Basis of Preparation of the Consolidat

53、ed Financial StatementsThe Groups financial information is presented in Euro.In some instances,information is presented in U.S.Dollars.All references in this document to“Euro”and“”refer to the currency introduced at the start of the third stage of European Economic and Monetary Union pursuant to the

54、 Treaty on the Functioning of the European Union,as amended,and all references to“U.S.Dollars”and“$”refer to the currency of the Unit-ed States of America(the“United States”or the“U.S.”).The language of this Annual Report is English.Certain legislative references and technical terms have been cited

55、in their original language in order that the correct technical meaning may be ascribed to them under applicable law.The financial data in the section“Financial Over-view”is presented in millions of Euro,while the per-centages presented are calculated using the under-lying figures in thousands of Eur

56、o.Certain totals in the tables included in this docu-ment may not add due to rounding.Except otherwise disclosed within this Annual Report,no significant change has occurred since the date of the Consolidated Financial Statements.FORWARD-LOOKING STATEMENTSStatements contained in this Annual Report,p

57、ar-ticularly those regarding our possible or assumed future performance,competitive strengths,costs,dividends,reserves and growth as well as industry growth and other trends and projections,are“for-ward-looking statements”that contain risks and un-certainties.In some cases,words such as“may”,“will”,

58、“expect”,“could”,“should”,“intend”,“estimate”,“antic-ipate”,“believe”,“remain”,“continue”,“on track”,“suc-cessful”,“grow”,“design”,“target”,“objective”,“goal”,“forecast”,“projection”,“outlook”,“prospects”,“plan”,“guidance”and similar expressions are used to identi-fy forward-looking statements.These

59、 forward-look-ing statements reflect the respective current views of Ferrari with respect to future events and involve significant risks and uncertainties that could cause actual results to differ materially from those indicat-ed in the forward-looking statements.Such risks and uncertainties include

60、,without limitation:our ability to preserve and enhance the value of the Ferrari brand;our ability to attract and retain qualified personnel;the success of our racing activities;our ability to keep up with advances in high per-formance car technology,to meet the challeng-es and costs of integrating

61、advanced technolo-gies,including hybrid and electric,more broadly into our car portfolio over time and to make ap-pealing designs for our new models;the impact of increasingly stringent fuel econ-omy,emissions and safety standards,including the cost of compliance,and any required chang-es to our pro

62、ducts,as well as possible future bans of combustion engine cars in cities and the potential advent of self-driving technology;increases in costs,disruptions of supply or shortages of components and raw materials;our low volume strategy;our ability to successfully carry out our controlled growth stra

63、tegy and,particularly,our ability to in-crease our presence in growth market countries;global economic conditions,macro events,pan-demics and conflicts,including the ongoing con-flict between Russia and Ukraine and the more recent hostilities between Israel and Hamas;changes in the general economic

64、environment(including changes in some of the markets in which we operate)and changes in demand for luxury goods,including high performance luxu-ry cars,demand for which is highly volatile;competition in the luxury performance automo-bile industry;changes in client preferences and automotive trends;o

65、ur ability to preserve our relationship with the automobile collector and enthusiast community;disruptions at our manufacturing facilities in Ma-ranello and Modena;climate change and other environmental im-pacts,as well as an increased focus of regulators and stakeholders on environmental matters;ou

66、r ability to maintain the functional and effi-cient operation of our information technology systems and to defend from the risk of cyberat-tacks,including on our in-vehicle technology;the ability of our current management team to operate and manage effectively and the reliance upon a number of key m

67、embers of executive management and employees;the performance of our dealer network on which we depend for sales and services;product warranties,product recalls and liability claims;the sponsorship and commercial revenues and expenses of our racing activities,as well as the popularity of motor sports

68、 more broadly;the performance of our lifestyle activities;our ability to protect our intellectual property rights and to avoid infringing on the intellectual property rights of others;our continued compliance with customs regula-tions of various jurisdictions;labor relations and collective bargainin

69、g agree-ments;our ability to ensure that our employees,agents and representatives comply with applicable law and regulations;changes in tax,tariff or fiscal policies and regula-tory,political and labor conditions in the jurisdic-tions in which we operate;our ability to service and refinance our debt

70、;20BOARD REPORTFERRARI N.V.2023 ANNUAL REPORT AND FORM 20-F exchange rate fluctuations,interest rate chang-es,credit risk and other market risks;our ability to provide or arrange for adequate ac-cess to financing for our dealers and clients,and associated risks;the adequacy of our insurance coverage

71、 to pro-tect us against potential losses;potential conflicts of interest due to director and officer overlaps with our largest shareholders;and other factors discussed elsewhere in this docu-ment.We expressly disclaim and do not assume any liabil-ity in connection with any inaccuracies in any of the

72、 forward-looking statements in this document or in connection with any use by any third party of such forward-looking statements.Actual results could differ materially from those anticipated in such forward-looking statements.We do not undertake an obligation to update or revise publicly any for-war

73、d-looking statements.Additional factors which could cause actual re-sults and developments to differ from those ex-pressed or implied by the forward-looking state-ments are included in the section“Risk Factors”of this Annual Report.These factors may not be ex-haustive and should be read in conjuncti

74、on with the other cautionary statements included in this Annu-al Report.You should evaluate all forward-looking statements made in this report in the context of these risks and uncertainties.CREATING VALUE FOR OUR SHAREHOLDERSFerrari is among the worlds leading luxury brands with unique,world-class

75、capabilities,and a vision built on our historic foundations and strengths.We are fiercely protective of our brand,which is among the most iconic and recognizable in the world and is critical to our value proposition to all of our stakeholders.We strive to maintain and enhance the power of our brand

76、and the passion we inspire in clients and the broader community of automotive enthusiasts by continuing our rigorous production and distribution model,which promotes excellence in innovation,design and uniqueness.We also support our brand value by promoting a strong connection to our company and our

77、 brand among the community of Ferrari enthusiasts.We fo-cus relentlessly on strengthening this connection by rewarding our most loyal clients through a range of initiatives,such as driving events and client activities in Maranello and,most importantly,by providing our most loyal and active clients w

78、ith preferential access to our newest,most exclusive and highest value cars.As a result,in 2023,we sold approximately 74%of our new cars to existing Ferrari clients and 40%to cli-ents being current owners of more than one Ferrari,which reinforces the demand for our cars and the image of luxury and e

79、xclusivity inherent in our brand.Our commitment to excellence and our pursuit of innovation,state-of-the-art performance and distinc-tion in design and engineering in our luxury cars is inseparable from our commitment to integrity,trans-parency and responsibility in conducting our busi-ness.By fully

80、 integrating environmental and social considerations with economic objectives we are able to identify potential risks and capitalize on additional opportunities,resulting in a process of continuous improvement.Sustainability is a core element of our governance model and executive management plays a

81、direct and active role in developing and achieving our sustainability objectives under the direction of our Board of Directors.As a clear demonstration of this commitment,we have strengthened the integra-tion of environmental topics in our strategic plan by presenting,in June 2022,a decarbonization

82、strategy that will help us reach carbon neutrality by 2030.The foundation of a responsible company rests on being fully attentive to the nature and extent of this in-terconnection and our understanding of both the po-tential effects of our activities and how those effects can be mitigated through re

83、sponsible management.All of the above is strictly linked to our values:INDIVIDUAL AND TEAM:Our talented individuals are our greatest resource.However they can only pursue the extraordinary by working to-gether as a team.By fostering integrity,excel-lence and generosity,we give each of our people the

84、 possibility to express their own full potential-and to be part of something greater.TRADITION AND INNOVATION:Tradition and in-novation drive each other.The ongoing quest for lasting firsts is what fuels the Ferrari legend.Our ability to combine revolutionary technological solutions with exceptional

85、 artisanal craftsman-ship is what enables us to create icons that stay timeless in a fast-changing world.PASSION AND ACHIEVEMENT:Ferraris racing spirit lives on in emotions that transcend the road and the track,ultimately becoming an au-thentic attitude towards life.Nothing excites us more than sett

86、ing ambitious targets and expec-tations-and then exceeding them,to push ev-ery boundary.It is how the power of passion be-comes the beauty of achievement.Ferrari audaciously redefines the limits of possible.To ensure tangible long-term value creation and a continuing integration of our sustainabilit

87、y strate-gy,we place particular emphasis on:a governance model based on transparency and integrity,fostering best practices;a safe and eco-friendly working environment in-cluding excellent working conditions and the ut-most respect for human rights;continuing professional development of our em-ploye

88、es;FERRARI N.V.2023 ANNUAL REPORT AND FORM 20-F21BOARD REPORT mutually beneficial relationships with busi-ness partners and the communities in which we operate;mitigation of environmental impacts from our production processes and the luxury cars we produce,addressing direct and indirect GHG emission

89、s,focusing on energy and materials,in addition to our electrification journey.The Non Financial Statement of our 2023 Annual Re-port addresses those aspects of our sustainability ef-forts that we have identified as being of greatest im-portance to our internal and external stakeholders.RISK FACTORSW

90、e face a variety of risks and uncertainties in our business.Those described below are not the only risks and uncertainties that we face.Additional risks and uncertainties that we are unaware of,or that we currently believe to be immaterial,may also become important factors that affect us.RISKS RELAT

91、ED TO OUR BUSINESS,STRATEGY AND OPERATIONSWE MAY NOT SUCCEED IN PRESERVING AND ENHANCING THE VALUE OF THE FERRARI BRAND,WHICH WE DEPEND UPON TO DRIVE DEMAND AND REVENUES.Our financial performance is influenced by the perception and recognition of the Ferrari brand,which,in turn,depends on many facto

92、rs such as the design,performance,quality and image of our cars,the appeal of our dealerships and stores,the success of our promotional activities including public relations and marketing,as well as our gen-eral profile,including our brands image of exclusiv-ity.The value of our brand and our abilit

93、y to achieve premium pricing for Ferrari-branded products may decline if we are unable to maintain the value and image of the Ferrari brand,including,in par-ticular,its aura of exclusivity.Maintaining the value of our brand will depend significantly on our ability to continue to produce luxury perfo

94、rmance cars of the highest quality.The market for luxury goods generally and for luxury automobiles in particular is intensely competitive,and we may not be success-ful in maintaining and strengthening the appeal of our brand.Client preferences,particularly among luxury goods,can vary over time,some

95、times rapid-ly.We are therefore exposed to changing percep-tions of our brand image,particularly as we seek to attract new generations of clients and,to that end,we continuously renovate and expand the range of our models.For example,the expansion of hybrid engine technology and electric engine tech

96、nology is introducing a significant change in the overall driver experience compared to the combustion en-gine cars of our historical models and the customer long term response to the change,particularly with respect to fully electric models,remains unknown.Any failure to preserve and enhance the va

97、lue of our brand may materially and adversely affect our ability to sell our cars,to maintain premium pricing,and to extend the value of our brand into other ac-tivities profitably or at all.More broadly,our lifestyle strategy will signifi-cantly increase the deployment of our brand in non-car produ

98、cts and experiences,including a large va-riety of Ferrari-branded accessories and apparel.If this strategy is not successful,our brand image may be diluted or tainted.We selectively license the Fer-rari brand to third parties that produce and sell Fer-rari-branded luxury goods and therefore we rely

99、on our licensing partners to preserve and enhance the value of our brand.If our licensees or the manufac-turers of these products do not maintain the stan-dards of quality and exclusivity that we believe are consistent with the Ferrari brand,or if such licens-ees or manufacturers otherwise misuse th

100、e Ferrari brand,our reputation and the integrity and value of our brand may be damaged and our business,oper-ating results and financial condition may be materi-ally and adversely affected.In addition,given the popularity,competitive-ness and demographic penetration of social media,Ferrari must main

101、tain a presence on the principal established and emerging social media platforms.If we cannot cost effectively use these marketing tools,if we fail to promote our products and services efficiently and effectively or to properly comply with the applicable laws and regulations,or if our social media c

102、ampaigns attract negative media attention or customer feedback,the value of our brand may be negatively impacted,as well as our results of op-erations.The popularity and reach of social media and other online platforms has also made it increas-ingly easier for individuals and groups to communi-cate

103、and share opinions and views.Any negative or adverse publicity about us,whether or not truthful,could rapidly disseminate and harm customer and community perceptions as well as confidence in our brand and ultimately impact our business,results of operation and financial condition.IF WE ARE NOT ABLE

104、TO ATTRACT AND RETAIN QUALIFIED PERSONNEL,WE MAY NOT BE ABLE TO MAINTAIN OUR COMPETITIVE POSITION OR TO IMPLEMENT OUR BUSINESS STRATEGY.Our success depends,in part,on our continuing abil-ity to attract,recruit,develop and retain qualified talent.Failure to do so effectively would adversely affect ou

105、r business.Competition to attract talent-ed employees is intense,and there can be a limited availability of individuals with the requisite knowl-edge and relevant experience.In addition,we may not succeed in instilling our corporate culture and values in our personnel and we may not be able to attra

106、ct,assimilate,develop or retain qualified per-22BOARD REPORTFERRARI N.V.2023 ANNUAL REPORT AND FORM 20-Fsonnel in the future.Failure to do so could adversely affect our business,including our ability to execute our global business strategy.OUR BRAND IMAGE DEPENDS IN PART ON THE SUCCESS OF OUR RACING

107、 ACTIVITIES,PARTICULARLY OUR FORMULA 1 TEAM.The prestige,identity,and appeal of the Ferrari brand depends in part on the success of our racing activities,which are a key component of our mar-keting strategy and may be perceived by our clients as a demonstration of the technological capabilities of o

108、ur cars,which also support the appeal of other Ferrari-branded luxury goods.In particular,we are focused on improving the results of our Scuderia Ferrari racing team in the Formula 1 World Cham-pionship and restoring our historical position as the premier racing team in Formula 1,as our most recent

109、Drivers Championship and Constructors Championship were in 2007 and 2008,respective-ly.If we are unable to attract and retain the neces-sary talent to succeed in international competitions or devote the capital necessary to fund successful racing activities,the value of the Ferrari brand and the app

110、eal of our cars and other luxury goods may suffer.Even if we are able to attract such talent and adequately fund our racing activities,there is no as-surance that this will lead to competitive success for our racing teams.The success of our racing teams depends in par-ticular on our ability to attra

111、ct and retain top drivers,racing team management and engineering talent.Our primary Formula 1 drivers,team managers and other key employees of Scuderia Ferrari are critical to the success of our Scuderia Ferrari racing team and if we were to lose their services,this could have a material adverse eff

112、ect on our success and corre-spondingly the Ferrari brand.If we are unable to find adequate replacements or to attract,retain and in-centivize drivers and team managers,other key em-ployees or new qualified personnel,the success of our racing teams may suffer.In addition,the caps on spending imposed

113、 by the Formula 1 governing body may hinder our ability to restore our racing preem-inence(See“Our revenues from Formula 1 activities may decline and our related expenses may grow”).Be-cause the success of our racing teams forms a large part of our brand identity,a sustained period without racing su

114、ccess could detract from the Ferrari brand and,as a result,from potential clients enthusiasm for the Ferrari brand and their perception of our cars,which could have an adverse effect on our business,results of operations and financial condition.IF WE ARE UNABLE TO KEEP UP WITH ADVANCES IN HIGH PERFO

115、RMANCE CAR TECHNOLOGY,OUR BRAND AND COMPETITIVE POSITION MAY SUFFER.Performance cars are characterized by lead-ing-edge technology that is constantly evolving.In particular,advances in racing technology often lead to improved technology in road cars.Although we invest heavily in research and develop

116、ment,we may be unable to maintain our leading position in high performance car technology and,as a result,our competitive position may suffer.As technologies change,we plan to upgrade or adapt our cars and introduce new models in order to continue to pro-vide cars with the latest technology.However,

117、our cars may not compete effectively with our com-petitors cars if we are not able to develop,source and integrate the latest technology into our cars.For example,in the next few years luxury performance cars will increasingly transition to hybrid and elec-tric technology,albeit at a slower pace com

118、pared to mass market vehicles.See“The introduction of electric technology in our cars is costly and its long-term success is uncertain”.We are also investing in connectivity,which requires significant investments in research and development;we expect that the fu-ture generation of cars will feature

119、a higher degree of connectivity for purposes of infotainment,safety and regulatory compliance.These in-car features may also in the near-to-medium term be driven by advances in artificial intelligence(or AI)which may need to be sourced externally and integrated into the car technology.Developing or

120、acquiring and applying new auto-motive technologies is costly,and may become even more costly in the future as available technology ad-vances and competition in the industry increases.If our research and development efforts do not lead to improvements in car performance relative to the competition,o

121、r if we are required to spend more to achieve comparable results,the sales of our cars or our profitability may suffer.IF OUR CARS DO NOT PERFORM AS EXPECTED OUR ABILITY TO DEVELOP,MARKET AND SELL OUR CARS COULD BE HARMED.Our cars may contain defects in design and manu-facture that may cause them no

122、t to perform as ex-pected or that may require repair.There can be no assurance that we will be able to detect and fix any defects in the cars prior to their sale to consumers.Our cars may not perform in line with our clients evolving expectations or in a manner that equals or exceeds the performance

123、 characteristics of oth-er cars currently available.For example,our new-er cars may not have the durability or longevity of current cars,and may not be as easy to repair as other cars currently on the market.Any product de-fects or any other failure of our performance cars to perform as expected cou

124、ld harm our reputation and result in adverse publicity,lost revenue,deliv-ery delays,product recalls,product liability claims,harm to our brand and reputation,and significant warranty and other expenses,and could have a ma-terial adverse impact on our business,operating results and financial conditi

125、on.FERRARI N.V.2023 ANNUAL REPORT AND FORM 20-F23BOARD REPORTIF OUR CAR DESIGNS DO NOT APPEAL TO CLIENTS,OUR BRAND AND COMPETITIVE POSITION MAY SUFFER.Design and styling are an integral component of our models and our brand.Our cars have historically been characterized by distinctive designs combin-

126、ing the aerodynamics of a sports car with powerful,elegant lines.We believe our clients purchase our cars for their appearance as well as their perfor-mance.However,we will need to renew over time the style of our cars to differentiate the new mod-els we produce from older models,and to reflect the

127、broader evolution of aesthetics in our markets.We devote great efforts to the design of our cars and most of our current models are designed by the Ferrari Design Centre,our in-house design team.The design of our electric cars and,more general-ly,of our future models with increased connectivity feat

128、ures will depart from past designs in appear-ance and functionality,thereby requiring new skills and presenting new challenges.If the design of our future models fails to meet the evolving tastes and preferences of our clients and prospective clients,or the appreciation of the wider public,our brand

129、 may suffer and our sales may be adversely affected.THE INTRODUCTION OF ELECTRIC TECHNOLOGY IN OUR CARS IS COSTLY AND ITS LONG-TERM SUCCESS IS UNCERTAIN.We are gradually introducing electric technology in our cars and we currently plan to introduce the first full electric Ferrari in 2025.In accordan

130、ce with our strategy,we believe electric technology,together with hybrid and other advanced technologies,will be key to providing continuing performance up-grades to our sports car customers,and will also help us capture the preferences of the urban,afflu-ent car purchasers whom we are increasingly

131、tar-geting,while helping us meet increasingly stricter emissions requirements.The integration of electric technology more broadly into our car portfolio over time may pres-ent challenges and costs.We expect to continue to increase research and development spending in the medium term,particularly on

132、electric technolo-gy-related projects.Although we expect to price our cars appropriately to recoup the investments and expenditures we are making,we cannot be certain that these expenditures will be fully recovered or that they will be recovered with our desired mar-gins.In addition,this transformat

133、ion of our car tech-nology creates risks and uncertainties such as the impact on driver experience and the impact on the cars residual value over time.Other manufactur-ers of luxury sports cars may be more successful in implementing electric technology.In the long-term,although we believe that combu

134、stion engines will continue to be fundamental to the Ferrari driver ex-perience for the foreseeable future,hybrid and pure electric cars may become the prevalent technology for performance sports cars thereby displacing combustion engine models.See also“If we are un-able to keep up with advances in

135、high performance car technology,our brand and competitive position may suffer.”.Because electric technology is a core compo-nent of our strategy,and in the medium term we plan to increase the portion of our shipments that feature vehicles with electric technology,if the introduction of electric cars

136、 proves too costly or is unsuccessful in the market,our business and results of operations could be materially adversely affected.NEW OR CHANGING LAWS,REGULATIONS OR POLICIES OF GOVERNMENTAL ORGANIZATIONS REGARDING,AMONG OTHER THINGS,INCREASED FUEL ECONOMY REQUIREMENTS,REDUCED GREENHOUSE GAS OR POLL

137、UTANT EMISSIONS,OR VEHICLE SAFETY,MAY HAVE A SIGNIFICANT EFFECT ON OUR COSTS OF OPERATION AND/OR HOW WE DO BUSINESS.We are subject throughout the world to comprehen-sive and constantly evolving laws,regulations and policies.We expect the extent of the legal and regu-latory requirements affecting our

138、 business and our costs of compliance to continue to increase signifi-cantly in the future.Failure to comply with applicable laws and regulatory requirements,in addition to the fines it may attract,may negatively impact our busi-ness,results of operation and financial condition as well as our reputa

139、tion.In Europe and the United States,for example,significant governmental regulation is driven by en-vironmental,fuel economy,vehicle safety and noise emission concerns.Evolving regulatory require-ments could significantly affect our product devel-opment plans and may limit the number and types of c

140、ars we sell and where we sell them,which may affect our revenue and profitability.Governmental regulations may increase the costs we incur to de-sign,develop and produce our cars and may affect our product portfolio.Regulation may also result in a change in the character or performance character-ist

141、ics of our cars,which may render them less ap-pealing to our clients.We anticipate that the number and extent of these regulations,and their effect on our cost structure and product line-up,will increase significantly in the future.In the United States,there is increasing focus on emissions and poll

142、ution regulations in light of chang-ing policies under the current administration.New regulations are in the process of being developed,and many existing and potential regulatory initiatives are subject to review by federal or state agencies or the courts.However,the coming federal elections throw c

143、onsiderable uncertainty on future changes.In May 2023,the US Environmental Protection Agen-cy(EPA)released its 2027 and later Multi-Pollutant Rulemaking proposal,introducing among other re-quirements,stricter emission standards(e.g.par-ticulate matter)and a potential ban of fuel enrich-24BOARD REPOR

144、TFERRARI N.V.2023 ANNUAL REPORT AND FORM 20-Fment for component protection.Moreover,special provisions for SVMs have almost been completely eliminated;i.e.GHG alternative standards are re-moved from model year 2025 and no flexibility on exhaust emission standards are provided.Depend-ing on the requi

145、rements included in the final rule,the costs of compliance associated with Multi-Pollutant Rulemaking may be substantial.In addition,we are subject to legislation relating to the emission of other air pollutants such as,among others,the EU“Euro 6”standards and Real Driving Emissions(RDE)standards,th

146、e“Tier 3”Motor Vehi-cle Emission and Fuel Standards issued by the U.S.Environmental Protection Agency(“EPA”),and the Zero Emission Vehicle regulation in California,which are subject to similar derogations for Small Volume Manufacturers(“SVMs”).We lost our status as an SVM for the United States Natio

147、nal Highway Traffic Safety Administration(“NHTSA”)in 2019,because our global production exceeded 10,000 vehicles,but we have not lost our SVM status for EU CO2 regulations or for EPA GHG regulations in the United States.In 2021,2022 and 2023,our global production exceed-ed 10,000 vehicles again and

148、therefore we were no longer considered a SVM by the NHTSA for the mod-el years 2021,2022 and 2023.We purchased the fuel economy(“CAFE”)credits needed to fulfill both our 2021 and 2022 deficits and we are currently evalu-ating the purchase of credits for 2023.We expect to continue to purchase credits

149、 in the coming years if required.We could lose our status as an SVM in the EU,the United States and other countries if we do not continue to meet all of the necessary eligibility criteria under applicable regulations as they evolve,not only in relation to volumes but also in relation to the con-diti

150、ons of operational independence.In order to meet these criteria we may need to modify our growth plans or other operations.Furthermore,even if we continue to benefit from derogations as an SVM,we may have a substantial impact on our financial results.As the state of California has been granted speci

151、al authority under the Clean Air Act to set its own vehi-cle emission standards,the California Air Resourc-es Board(“CARB”)enacted regulations under which manufacturers of vehicles for certain model years that are in compliance with the EPA greenhouse gas emissions regulations are also deemed to be

152、in com-pliance with Californias greenhouse gas emission regulations(the so-called“deemed to comply”pro-vision).These regulations have evolved over time.In 2018,the CARB amended its existing regulations to clarify that the“deemed to comply”provision would not be available for certain model years if t

153、he EPA stan-dards for those years were altered via an amendment of federal regulations and,in 2019,EPA announced a decision to withdraw Californias waiver of preemp-tion under the Clean Air Act.In this decision,the EPA also affirmed the NHTSAs authority to set nationally applicable regulatory standa

154、rds under the preemp-tion provisions of the Energy Policy and Conservation Act(EPCA).On March 9,2022,the EPA rescinded its withdrawal of the waiver for Californias light-duty ve-hicle GHG and zero emission vehicle(ZEV)standards.California and Section 177 states may again enforce those standards.Subs

155、equently,CARB clarified that the compliance with CARBs GHG regulations is ex-FERRARI N.V.2023 ANNUAL REPORT AND FORM 20-F25BOARD REPORTpected from model year 2021 for all manufacturers.Ferrari meets the requirements to be classified as an SVM based on the relevant regulations in the state of Califor

156、nia.Therefore,in 2023,in agreement with CARB,Ferrari petitioned for SVM 2021-2025 alterna-tive standards.No official approval has been received from CARB to date.It may be necessary also to in-crease the number of tests to be performed in order to follow the CARB specific procedures.In relation to t

157、he safety legislation framework,in December 2023,NHTSA published an advanced notice of proposed rulemaking as a first regulatory step to introduce a new FMVSS regulation providing requirements for new technologies to prevent driver distraction,drowsiness,and drunk impaired driving.The costs of compl

158、iance associated with these and similar rulemaking may be substantial.Other governments around the world,such as those in Canada,South Korea,China and certain Middle Eastern countries,are also creating new policies to address these issues which could be even more stringent than the U.S.or European r

159、equirements.As in the United States and Europe,these government policies if applied to us could significantly affect our product development plans.Under these existing regulations,as well as new or stricter rules or poli-cies,we could be subject to sizable civil penalties or have to restrict or modi

160、fy product offerings drasti-cally to remain in compliance.We may have to incur substantial capital expenditures and research and development expenditures to upgrade products and manufacturing facilities,which would have an impact on our cost of production and results of operation.In the future,the a

161、dvent of self-driving technology may result in regulatory changes that we cannot predict but may include limitations or bans on hu-man driving in specific areas.In 2020 the European Commission issued its new digital strategy policies and in 2022 its new digital strategy,which represent a priority in

162、 the European Commissions regulatory agenda.Although no regulations have been issued in this regard,the European Commission has showed a determination to strengthen Europes digital sov-ereignty and role as a standard setter,with a clear focus on data,technology,and infrastructure.Similarly,driving b

163、ans on combustion engine vehicles could be imposed,particularly in metropol-itan areas,as a result of progress in electric and hy-brid technology.Several others regulations are also emerging to take into account the non-exhaust emis-sions such as brakes and tires particulate emissions and the enviro

164、nmental impact of the electric and hy-brid vehicles components,with a particular focus on batteries and waste batteries.To comply with current and future environmen-tal rules in all markets in which we sell our cars,we may have to incur substantial capital expenditure and research and development ex

165、penditure to up-grade products and manufacturing facilities,which would have an impact on our cost of production and results of operations.For a description of the regulations referred to in the paragraphs above please see“Overview of Our BusinessRegulatory Matters”.26BOARD REPORTFERRARI N.V.2023 AN

166、NUAL REPORT AND FORM 20-FWE DEPEND ON OUR SUPPLIERS,MANY OF WHICH ARE SINGLE SOURCE SUPPLIERS;AND IF THESE SUPPLIERS FAIL TO DELIVER NECESSARY RAW MATERIALS,COMPONENTS,PARTS,SYSTEMS,SERVICES OR INFRASTRUCTURE OF APPROPRIATE QUALITY IN A TIMELY MANNER,OUR OPERATIONS MAY BE DISRUPTED.Our business depe

167、nds on a significant number of suppliers,which provide the raw materials,com-ponents,parts,systems,services and infrastruc-ture we require to manufacture cars and parts and to operate our business.We use a variety of raw materials in our business,including aluminum,and precious metals such as pallad

168、ium and rhodium.We source materials from a limited number of sup-pliers.We cannot guarantee that we will be able to maintain access to these raw materials,and in some cases this access may be affected by factors out-side of our control and the control of our suppliers.In addition,prices for these ra

169、w materials fluctuate and while we seek to manage this exposure,we may not be successful in mitigating these risks.As with raw materials,we are also at risk of supply disruption and shortages in parts and components we purchase for use in our cars.We source a vari-ety of key components from third pa

170、rties,including transmissions,brakes,driving-safety systems,navi-gation systems,mechanical,electrical and electron-ic parts,plastic components as well as castings and tires,which makes us dependent upon the suppliers of such components.In coming years,we will also require a greater number of compone

171、nts for hybrid and electric engines as we continue to deploy hybrid and electric technology in our cars,and we expect producers of these components will be called upon to increase the levels of supply as the shift to hybrid or electric technology gathers pace in the industry.While we obtain componen

172、ts from multiple sources whenever possible,similar to other small volume car manufacturers,most of the key components we use in our cars are purchased by us from single source suppliers.We generally do not qualify alternative sources for most of the single-sourced components we use in our cars and w

173、e do not maintain long-term agreements with a number of our suppliers.Further-more,we have limited ability to monitor the financial stability of our suppliers.While we believe that we may be able to estab-lish alternate supply relationships and can obtain or engineer replacement components for our s

174、in-gle-sourced components,we may be unable to do so in the short term,or at all,at prices or costs that we believe are reasonable.Qualifying alternate sup-pliers or developing our own replacements for cer-tain highly customized components of our cars may be time consuming,costly and may force us to

175、make costly modifications to the designs of our cars.Moreover,as the lifecycle of several components becomes shorter in light of the technological shift affecting the industry,a number of the components we use in our production processes may become in the near term obsolete,which will require us to

176、im-plement new procurement strategies.Those strate-gies may not be successful and we may not be able to source new components in a timely manner or at competitive prices,and our results of operations may be adversely affected.In the past,we have replaced certain suppliers because they failed to prov

177、ide components that met our quality control standards.The loss of any single or limited source supplier or the disruption in the supply of components from these suppliers could lead to delays in car deliveries to our clients,which could adversely affect our relationships with our clients and also ma

178、terially and adversely affect our operating results and financial condition.The supply of raw materials,parts and components may also be disrupted or interrupted by natural disasters,or by unexpected fluctuations in market demand and sup-ply,such as the global shortage of semiconductors that impacte

179、d the automotive industry in particular,primarily in 2021.If any major disasters occur,such as earthquakes,fires,floods,hurricanes,wars,ter-rorist attacks,pandemics or other events,our sup-ply chain may be disrupted,which may stop or delay production and shipment of our cars.The ongoing conflict bet

180、ween Russia and Ukraine,the recogni-tion by Russia of the independence of the self-pro-claimed republics of Donetsk and Luhansk,in the Donbas region of Ukraine and the resulting geopolit-ical tensions continue to have a significant impact on the global economy resulting in a sharp increase in energy

181、 prices and higher prices for certain raw ma-terials and goods and services,which in turn is con-tributing to higher inflation globally.The Russian/Ukrainian conflict has continued to escalate without a resolution expected in the near future,with the short and long-term impact on financial and busi-

182、ness conditions in Europe remaining highly uncer-tain.Many governments around the world,including those of the United States,the European Union and Japan,have announced the imposition of sanctions on certain industry sectors and parties in Russia and the regions of Donetsk and Luhansk,as well as enh

183、anced export controls on certain industries and products,including luxury goods,and the exclusion of certain Russian financial institutions from the SWIFT system.On March 11,2022,the President of the United States issued an executive order prohib-iting exports to Russia of luxury goods(including lux

184、ury transportation items such as automobiles and racing cars).Shortly thereafter,on March 15,2022,the Council of the European Union imposed new sanctions on Russia prohibiting the export of luxury goods having a value in excess of 300 per item.These and any additional sanctions and export controls,a

185、s well as any counterresponses by the governments of Russia or other jurisdictions,could adversely affect,directly or indirectly,our supply chain,with negative implications on the availabili-ty and prices of raw materials,and our customers,as well as the global financial markets and financial servic

186、es industry.See also“We are subject to risks FERRARI N.V.2023 ANNUAL REPORT AND FORM 20-F27BOARD REPORT28BOARD REPORTFERRARI N.V.2023 ANNUAL REPORT AND FORM 20-Frelated to pandemics or public health crises that may materially and adversely affect our business”for a discussion of widespread public he

187、alth crises which may affect our supply chain directly or indirectly.Changes in our supply chain have in the past resulted and may in the future result in increased costs and delays in car production.We have also ex-perienced cost increases from certain suppliers in order to meet our quality targets

188、 and development timelines and because of design changes that we have made,and we may experience similar cost in-creases in the future.We are negotiating with ex-isting suppliers for cost reductions,seeking new and less expensive suppliers for certain parts,and attempting to redesign certain parts t

189、o make them less expensive to produce.If we are unsuccessful in our efforts to control and reduce supplier costs while maintaining a stable source of high quality supplies,our operating results will suffer.Addition-ally,cost reduction efforts may disrupt our normal production processes,thereby harmi

190、ng the quality or volume of our production.Furthermore,if our suppliers fail to provide com-ponents in a timely manner or at the level of quality necessary to manufacture our cars,our clients may face longer waiting periods which could result in neg-ative publicity,harm our reputation and relationsh

191、ip with clients and have a material adverse effect on our business,operating results and financial condition.OUR LOW VOLUME STRATEGY MAY LIMIT POTENTIAL PROFITS,AND IF VOLUMES INCREASE OUR BRAND EXCLUSIVITY MAY BE ERODED.A key to the appeal of the Ferrari brand and our mar-keting strategy is the aur

192、a of exclusivity and the sense of luxury which our brand conveys.A central facet to this exclusivity is the limited number of models and cars we produce and our strategy of maintaining our car waiting lists to reach the optimal combina-tion of exclusivity and client service.Our low volume strategy i

193、s also an important factor in the prices that our clients are willing to pay for our cars.This focus on maintaining exclusivity limits our potential sales growth and profits compared to manufacturers less reliant on the exclusivity of their products.On the other hand,our current growth strategy cont

194、emplates a measured but significant increase in car sales above current levels as we target a larger customer base and modes of use,we increase our focus on reaching a younger customer base and creating new Ferrari collectors,and our product portfolio evolves with a broader product range.We sold 13,

195、663 cars in 2023 compared to 11,155 cars in 2021 and 7,255 cars in 2014,the year before our ini-tial public offering,and sales are expected to contin-ue to increase gradually.In pursuit of our strategy,we may be unable to main-tain the exclusivity of the Ferrari brand.If we are unable to balance bra

196、nd exclusivity with increased production,we may erode the desirability and ulti-mately the consumer demand or relative pricing for our cars.As a result,if we are unable to increase car production meaningfully or introduce new car mod-els without eroding the image of exclusivity in our brand we may b

197、e unable to significantly increase our revenues.THE SMALL NUMBER OF CAR MODELS WE PRODUCE AND SELL MAY RESULT IN GREATER VOLATILITY IN OUR FINANCIAL RESULTS.We depend on the sales of a small number of car models to generate our revenues.Our current product portfolio consists of eight Range models,fo

198、ur Special Series models and one strictly limited edition Icona model.In 2022,with the launch of the Purosangue and the 296 GTS,we met our previously announced objective of introducing 15 new models by 2022(as announced at our Capital Markets Day in September 2018),which is unprecedented for Fer-rar

199、i over a similar time frame.At our Capital Markets Day in June 2022,we announced our plan to introduce 15 new models over the period from 2023 to 2026.In 2023,we launched five new models:the Roma Spi-der,the SF90 XX Stradale and SF90 XX Spider(the first ever street legal XX models),the 296 Challenge

200、 and the 499P Modificata.Despite our expanded of-fering,a limited number of models will continue to account for a large portion of our revenues at any given time in the foreseeable future,compared to other automakers.Therefore,a single unsuccess-ful new model would harm us more than it would other a

201、utomakers.There can be no assurance that our cars will continue to be successful in the mar-ket,or that we will be able to launch new models on a timely basis compared to our competitors.It gen-erally takes several years from the beginning of the development phase to the start of production for a ne

202、w model and the car development process is cap-ital intensive.As a result,we would likely be unable to replace quickly the revenue lost from one of our main car models if it does not achieve market accep-tance.Furthermore,our revenues and profits may also be affected by our Special Series and limite

203、d edition models(including the Icona limited editions)that we launch from time to time and which are typ-ically priced higher than our range models.There can be no assurance that we will be successful in de-veloping,producing and marketing additional new cars(including our Special Series and limited

204、 edition models)to sustain sales growth in the future.OUR CONTROLLED GROWTH STRATEGY EXPOSES US TO RISKS.Our growth strategy includes a controlled expansion of our sales and operations,including the launch-ing of new car models and expanding sales,as well as dealer operations and workshops,in target

205、ed growth regions internationally.In particular,our growth strategy includes the opportunity for us to expand operations in regions and markets that we have identified as having relatively high growth po-FERRARI N.V.2023 ANNUAL REPORT AND FORM 20-F29BOARD REPORTtential.We may encounter difficulties

206、in entering and establishing ourselves in these markets,including in establishing new successful dealership networks and facing more significant competition from com-petitors that are already present in those regions.Our growth depends on the continued success of our existing cars,as well as the suc

207、cessful introduc-tion of new cars.Our ability to create new cars and to sustain existing car models is affected by whether we can successfully anticipate and respond to con-sumer preferences and car trends.The failure to de-velop successful new cars or delays in their launch that could result in oth

208、ers bringing new products and leading-edge technologies to the market first,could compromise our competitive position and hinder the growth of our business.As part of our growth strat-egy,we broadened the range of our models to cap-ture additional customer demand for different types of vehicles and

209、modes of utilization.In 2022,with the launch of the Purosangue and the 296 GTS,we met our previously announced objective of introducing 15 new models by 2022(as announced at our Capital Markets Day in September 2018),which is unprece-dented for Ferrari over a similar time frame.At our Capital Market

210、s Day in June 2022,we announced our plan to introduce 15 new models over the peri-od from 2023 to 2026.In 2023,we launched five new models:the Roma Spider,the SF90 XX Stradale and SF90 XX Spider(the first ever street legal XX models),the 296 Challenge and the 499P Modificata.In addi-tion,we are grad

211、ually but rapidly expanding the use of hybrid and electric technology in our road cars as we broaden and expand our product portfolio.In 2023,hybrid cars represented 44%of our shipments.While we will seek to ensure that these changes re-main fully consistent with the Ferrari car identity,we cannot b

212、e certain that they will prove profitable and commercially successful.Our controlled growth strategy may expose us to new business risks that we may not have the ex-pertise,capability or the systems to manage.This strategy will also place significant demands on us by requiring us to continuously evo

213、lve and improve our operational,financial and internal controls.Con-tinued expansion also increases the challenges in-volved in maintaining high levels of quality,manage-ment and client satisfaction,recruiting,training and retaining sufficiently skilled management,technical and marketing personnel.I

214、f we are unable to man-age these risks or meet these demands,our growth prospects and our business,results of operations and financial condition could be adversely affected.We continuously improve our international net-work footprint and skill set.We also plan to open addi-tional retail stores in in

215、ternational markets.We do not yet have significant experience directly operating in many of these markets,and in many of them we face established competitors.Many of these countries have different operational characteristics,including but not limited to employment and labor,transporta-tion,logistics

216、,real estate,environmental regulations and local reporting or legal requirements.Consumer demand and behavior,as well as tastes and purchasing trends may differ in these markets,and as a result,sales of our products may not be suc-cessful,or the margins on those sales may not be in line with those w

217、e currently anticipate.Furthermore,such markets will have upfront short-term invest-ment costs that may not be accompanied by suffi-cient revenues to achieve typical or expected opera-tional and financial performance and therefore may be dilutive to us in the short-term.In many of these countries,th

218、ere is significant competition to attract and retain experienced and talented employees.Consequently,if our international expansion plans are unsuccessful,our business,results of op-erations and financial condition could be materially adversely affected.GLOBAL ECONOMIC CONDITIONS AND MACRO EVENTS MA

219、Y ADVERSELY AFFECT US.Our sales volumes and revenues may be affect-ed by overall general economic conditions within the various countries in which we operate.Deteri-orating general economic conditions may affect disposable incomes and reduce consumer wealth impacting client demand,particularly for l

220、uxury goods,which may negatively impact our profitabil-ity and put downward pressure on our prices and volumes.Furthermore,during recessionary peri-ods,social acceptability of luxury purchases may decrease and higher taxes may be more likely to be imposed on certain luxury goods including our cars,w

221、hich may affect our sales.Adverse econom-ic conditions may also affect the financial health and performance of our dealers in a manner that will affect sales of our cars or their ability to meet their commitments to us.The luxury performance car market is generally affected by global macroeconomic c

222、onditions and many factors affect the level of consumer spending in the luxury performance car industry,including the state of the economy as a whole,stock market per-formance,interest and exchange rates,inflation,po-litical uncertainty,the availability of consumer credit,tax rates,unemployment leve

223、ls and other matters that influence consumer confidence.In general,al-though our sales have historically been compara-tively resilient in periods of economic turmoil,sales of luxury goods tend to decline during recessionary periods when the level of disposable income tends to be lower or when consum

224、er confidence is low.Global economic growth slowed sharply in the re-cent years and a recovery in 2024 is uncertain.In ad-dition,significant inflationary pressures appeared in 2021 in many of the markets in which we operate and this trend was exacerbated in 2022.While infla-tion recorded in 2023 was

225、 more moderate than in 2022,if inflation remains elevated or increases in the future we could face further increases in the costs we incur for raw materials,utilities or services,which could adversely affect our business and re-sults of operations if we are not able to pass on the 30BOARD REPORTFERR

226、ARI N.V.2023 ANNUAL REPORT AND FORM 20-Fincreased costs to our customers or successfully implement other mitigating actions.Following the rise in inflation,several main central banks raised in-terest rates rapidly over the course of 2022 and part of 2023.While certain central banks now appear to fol

227、low a softer monetary stance,a higher cost of borrowing compared to recent historical periods may persist in the market.Such increases could impact our ability to obtain affordable financing or could make our cars less affordable to clients,which could cause consumers to delay the purchase of our ca

228、rs or to purchase less expensive cars.We distribute our products internationally and we may be affected by downturns in general eco-nomic conditions or uncertainties regarding future economic prospects that may impact the countries in which we sell a significant portion of our prod-ucts.In particula

229、r,the majority of our current sales are in the EU and in the United States;if we are un-able to expand in other growth markets,a down-turn in mature economies such as the EU and the United States may negatively affect our financial performance.In addition,uncertainties regarding future trade arrange

230、ments and industrial policies in various countries or regions create additional mac-roeconomic risk.In the United States,any policy to discourage import into the United States of vehicles produced elsewhere could adversely affect our op-erations.Any new policies may have an adverse ef-fect on our bu

231、siness,financial condition and results of operations.In general,the banking,economic and monetary crisis,as well as the escalating energy prices triggered by the ongoing conflict between Russia and Ukraine,as well as conflicts elsewhere in the world(including the conflict between Israel and Hamas wh

232、ich has the potential for escalation in the region),may reduce customers interest for,and financial ability to buy,luxury products.Although Mainland China,Hong Kong and Taiwan only repre-sented 10 percent of our net revenues in 2023 and is expected to represent a limited proportion of our growth in

233、the short term,slowing economic condi-tions in Mainland China,Hong Kong and Taiwan may adversely affect our revenues in that region.A sig-nificant decline in the EU,the global economy or in the specific economies of our markets,or in con-sumers confidence,could have a material adverse effect on our

234、business.See also“Developments in China and other growth markets may adversely af-fect our business”.Additionally,sanctions and export controls which could be introduced as a result of geopoliti-cal tensions and conflicts could adversely affect,di-rectly or indirectly,our supply chain and customers,

235、as well as the global financial markets and financial services industry.See also“We depend on our sup-pliers,many of which are single source suppliers;and if these suppliers fail to deliver necessary raw materials,systems,components and parts of appro-priate quality in a timely manner,our operations

236、 may be disrupted”.WE ARE SUBJECT TO RISKS RELATED TO EPIDEMICS,PANDEMICS OR OTHER PUBLIC HEALTH CRISES THAT MAY MATERIALLY AND ADVERSELY AFFECT OUR BUSINESS.Public health crises such as epidemics,pandemics or similar outbreaks could adversely impact our business.From 2020 to 2022,the global spread

237、of COVID-19,including variants thereof,led to govern-ments around the world mandating increasingly re-strictive measures to contain the pandemic,includ-ing social distancing,quarantine,“shelter in place”or similar orders,travel restrictions and suspension of non-essential business activities.The COV

238、ID-19 pandemic caused significant disruption to the global economy,including changes in consumer spending and behavior,disruption to supply chains and finan-cial markets,as well as restrictions on business and individual activities,leading to a global economic slowdown and a severe recession in seve

239、ral of the markets in which we operate,which may reverber-ate after all restrictions are lifted.Our operations were also profoundly disrupted,with our produc-tion suspended at our two plants for several months in 2020,and our suppliers and dealers were similar-ly affected.Governmental restrictions w

240、ere lifted and partly reintroduced reflecting developments in the pandemic.Future pandemics may have similar,or worse,impacts on our operations.Furthermore,pandemics or other widespread public health crises may lead to financial distress for our suppliers or dealers,as a result of which they may hav

241、e to permanently discontinue or substantial-ly reduce their operations.Any of the foregoing could limit customer de-mand or our capacity to meet customer demand and have a material adverse effect on our business,results of operations and financial condition.Pandemics or other widespread public healt

242、h crises may also exacerbate other risks disclosed in this section,including,but not limited to,our com-petitiveness,demand for our products,shifting consumer preferences,exchange rate fluctuations,customers and dealers access to affordable fi-nancing,and credit market conditions affecting the avail

243、ability of capital and financial resources.WE FACE COMPETITION IN THE LUXURY PERFORMANCE CAR INDUSTRY.We face competition in all product categories and markets in which we operate.We compete with oth-er international luxury performance car manufac-turers which own and operate well-known brands of hi

244、gh-quality cars,some of which form part of larger automotive groups and may have greater financial resources and bargaining power with suppliers than we do,particularly in light of our policy to maintain low volumes in order to preserve and enhance the exclusivity of our cars.In addition,several oth

245、er man-ufacturers have recently entered or are attempting to enter the upper end of the luxury performance FERRARI N.V.2023 ANNUAL REPORT AND FORM 20-F31BOARD REPORTcar market,including with advanced electric tech-nology,thereby increasing competition.We believe that we compete primarily on the basi

246、s of our brand image,the performance and design of our cars,our reputation for quality and the driving experience for our customers.If we are unable to compete success-fully,our business,results of operations and financial condition could be adversely affected.OUR BUSINESS IS SUBJECT TO CHANGES IN C

247、LIENT PREFERENCES AND TRENDS IN THE AUTOMOTIVE AND LUXURY INDUSTRIES.Our continued success depends in part on our abili-ty to originate and define products and trends in the automotive and luxury industries,as well as to antic-ipate and respond promptly to changing consum-er demands and automotive t

248、rends in the design,styling,technology,production,merchandising and pricing of our products.Our products must appeal to a client base whose preferences cannot be pre-dicted with certainty and are subject to rapid change.Evaluating and responding to client preferences has become even more complex in

249、recent years,due to our expansion in new geographical markets.The in-troduction of hybrid and electric technology and the associated changes in customer preferences that may follow are also a challenge we will face in future periods.See also“If we are unable to keep up with advances in high performa

250、nce car technology,our brand and competitive position may suffer”and“The introduction of electric technology in our cars is cost-ly and its long-term success is uncertain”.In addition,there can be no assurance that we will be able to pro-duce,distribute and market new products efficiently or that an

251、y product category that we may expand or introduce will achieve sales levels sufficient to gen-erate profits.Furthermore this risk is particularly pronounced as we expand in accordance with our strategy into adjacent segments of the luxury indus-try,where we do not have a level of experience and mar

252、ket presence comparable to the one we have in the automotive industry.Any of these risks could have a material adverse effect on our business,re-sults of operations and financial condition.DEMAND FOR LUXURY GOODS,INCLUDING LUXURY PERFORMANCE CARS,IS VOLATILE,WHICH MAY ADVERSELY AFFECT OUR OPERATING

253、RESULTS.Volatility of demand for luxury goods,in particular luxury performance cars,may adversely affect our business,operating results and financial condition.The market in which we sell our cars is subject to volatility in demand.Demand for luxury automobiles depends to a large extent on general,e

254、conomic,po-litical and social conditions in a given market as well as the introduction of new vehicles and technologies.Global economic growth slowed sharply in 2022,stabilized in 2023 and the outlook for 2024 is uncer-tain.As a luxury performance car manufacturer and low volume producer,we compete

255、with larger auto-mobile manufacturers many of which have greater financial resources in order to withstand changes in the market and disruptions in demand.Demand for our cars may also be affected by factors direct-ly impacting the cost of purchasing and operating automobiles,such as the availability

256、 and cost of fi-nancing,prices of raw materials and parts and com-ponents,fuel costs and governmental regulations,including tariffs,import regulation and other taxes,including taxes on luxury goods,resulting in limita-tions to the use of high performance sports cars or luxury goods more generally.Vo

257、latility in demand may lead to lower car unit sales,which may result in downward price pressure and adversely affect our business,operating results and financial condition.The impact of a luxury market downturn may be par-ticularly pronounced for the most expensive among our car models,which generat

258、e a more than pro-portionate amount of our profits,therefore exacer-bating the impact on our results.In addition,these effects may have a more pronounced impact on us given our low volume strategy and relatively smaller scale as compared to large global mass-market au-tomobile manufacturers.THE VALU

259、E OF OUR BRAND DEPENDS IN PART ON THE AUTOMOBILE COLLECTOR AND ENTHUSIAST COMMUNITY.An important factor in the connection of clients to the Ferrari brand is our strong relationship with the global community of automotive collectors and en-thusiasts,particularly collectors and enthusiasts of Ferrari

260、automobiles.This is influenced by our close ties to the automotive collectors community and our support of related events(such as car shows and driving events)at our headquarters in Maranello and through our dealers,the Ferrari museums and affiliations with regional Ferrari clubs.The support of this

261、 community also depends upon the percep-tion of our cars as collectibles,which we also sup-port through our Ferrari Classiche services,and the active resale market for our automobiles which en-courages interest over the long-term.The increase in the number of cars we produce relative to the number o

262、f automotive collectors and purchasers in the secondary market may adversely affect our cars value as collectible items and in the secondary market more broadly.If there is a change in collector appetite or dam-age to the Ferrari brand,our ties to,and the support we receive from,this community may b

263、e dimin-ished.Such a loss of enthusiasm for our cars from the automotive collectors community could harm the perception of the Ferrari brand and adversely impact our sales and profitability.WE DEPEND ON OUR MANUFACTURING FACILITIES IN MARANELLO AND MODENA.We assemble all of the cars that we sell and

264、 manu-facture,and all of the engines we use in our cars,at 32BOARD REPORTFERRARI N.V.2023 ANNUAL REPORT AND FORM 20-Four production facility in Maranello,Italy,where we also have our corporate headquarters.We manu-facture all of our car chassis in a nearby facility in Modena,Italy.Our Maranello or M

265、odena plants could become unavailable either permanently or tempo-rarily for a number of reasons,including contamina-tion,power shortage or labor unrest.Alternatively,changes in law and regulation,including export,tax and employment laws and regulations,or econom-ic conditions,including wage inflati

266、on,could make it uneconomic for us to continue manufacturing our cars in Italy.In the event that we were unable to continue production at either of these facilities or it became uneconomic for us to continue to do so,we would need to seek alternative manufacturing ar-rangements which would take time

267、 and reduce our ability to produce sufficient cars to meet demand.Moving manufacturing to other locations may also affect the perception of our brand and car quality among our clients.Such a transfer would materially reduce our revenues and could require significant investment,which as a result coul

268、d have a material adverse effect on our business,results of opera-tions and financial condition.Maranello and Modena are located in the Emil-ia-Romagna region of Italy which has the potential for seismic activity.For instance,in 2012 a major earth-quake struck the region,causing production at our fa

269、cilities to be temporarily suspended for one day.If major disasters such as earthquakes,fires,floods,hurricanes,wars,terrorist attacks,pandemics or other events occur,our headquarters and produc-tion facilities may be seriously damaged,or we may stop or delay production and shipment of our cars.Such

270、 damage from disasters or unpredictable events could have a material adverse impact on our busi-ness,results from operations and financial condition.WE ARE SUBJECT TO RISKS ASSOCIATED WITH CLIMATE CHANGE AND OTHER ENVIRONMENTAL IMPACTS,AS WELL AS AN INCREASED FOCUS OF REGULATORS AND STAKEHOLDERS ON

271、ENVIRONMENTAL MATTERS.Global climate change is resulting,and is expected to continue to result,in natural disasters and extreme weather,such as drought,wildfires,storms,sea-lev-el rise,flooding,heat waves and cold waves,occur-ring more frequently or with greater intensity.Such extreme events are dri

272、ving changes in market dy-namics,stakeholder expectations,local,national and international climate change policies and regulations.We are subject to climate-related risks where we conduct our business.Physical impacts of cli-mate change,including natural disasters and ad-verse weather,could result i

273、n disruptions to us,our suppliers,vendors,customers and logistics hubs.These risks may also exacerbate other risks disclosed in this“Risk Factors”section,including but not limited to,our competitiveness,demand for our products,shifting consumer preferences,availability and price of raw materials,and

274、 concen-tration of our production activities in Maranello and Modena.The global automotive industry in particular is currently experiencing significant developments due to an increased focus on climate change and evolving regulatory requirements relating to fuel efficiency,electrification and greenh

275、ouse gas emissions,among others.These evolving requirements and technologi-cal changes have caused us,and are expected to con-tinue to cause us,to adapt and change certain aspects of our operations,our future plans and strategies and the allocation of our resources.Failure to effectively manage thes

276、e aspects may result in increased costs,reputational risks,limits in our ability to manufacture or market certain of our products,or otherwise neg-atively impact our business,results of operations,profitability and competitive position.Additionally,our stakeholders,including our cus-tomers,employees

277、,suppliers and investors,are in-creasingly focused on environment,social and gover-nance(“ESG”)matters.From time to time,in alignment with our sustainability strategy,we establish and pub-licly announce goals and commitments to improve our environmental performance and we have been taking deliberate

278、 actions to achieve carbon neutrality by 2030.There can be no assurance that our stake-holders will agree with our sustainability strategy or will be satisfied with our actions in relation to these matters.Additionally,if we fail(or are perceived to fail)to execute our sustainability strategy or ach

279、ieve our environmental goals,if our sustainability strat-egy or environmental goals do not meet the expec-tations and standards of our stakeholders,or if we improperly report our progress in the execution of our sustainability strategy or the achievement of our environmental goals,our reputation cou

280、ld be nega-tively impacted,causing our customers,employees,suppliers and investors to lose confidence in us and our brand,which could negatively impact our busi-ness,access to capital or have an adverse effect on our revenues and profitability.A DISRUPTION IN OUR INFORMATION TECHNOLOGY,INCLUDING AS

281、A RESULT OF CYBERCRIMES,COULD COMPROMISE CONFIDENTIAL,PROPRIETARY AND SENSITIVE INFORMATION.We depend on our information technology and data processing systems to operate our business,and a significant malfunction or disruption in the operation of our systems,human error,interruption to power supply

282、,or a security breach that compromises the confidential and sensitive information stored in those systems,could disrupt our business and adversely impact our ability to compete.A leak of proprietary technical information relating to our cars and our production processes,for example,could cause signi

283、ficant competitive harm.Our ability to keep our business operating effectively depends on the func-tional and efficient operation by us and our third party service providers of our information,data process-ing and telecommunications systems,including our FERRARI N.V.2023 ANNUAL REPORT AND FORM 20-F3

284、3BOARD REPORTcar design,manufacturing,inventory tracking and billing and payment systems.We rely on these sys-tems to enable a number of business processes and help us make a variety of day-to-day business deci-sions as well as to track transactions,billings,pay-ments and inventory.Such systems are

285、susceptible to malfunctions and interruptions due to equipment damage,power outages,and a range of other hard-ware,software and network problems.Those sys-tems are also susceptible to cybercrime,or threats of intentional disruption,which are increasing in terms of sophistication and frequency,especi

286、ally considering that such cyber incidents may remain undetected for long periods of time.For example,in March 2023 we were the subject of a ransomware attack.Ferrari decided not to pay the ransomware,and rejection of the ransom request led to the leak of a significant amount of customers personal i

287、dentifi-able information and we were provided evidence of such leak with respect to several hundred custom-ers.We notified our customers of the potential data exposure and the nature of the incident and we have worked with third party experts to further reinforce our systems.Future breaches may adve

288、rsely affect our operations and reputation.Additionally,a significant portion of our office personnel moved to a“remote work”model in re-sponse to the COVID-19 pandemic and part-time re-mote work arrangements are currently in place for our personnel.Remote work relies heavily on the use of remote ne

289、tworking and online conferencing ser-vices,which expose us to additional cybersecurity risks.For any of these reasons,we may experience system malfunctions or interruptions.Although our systems are diversified,including mul-tiple server locations,several layers of cybersecurity countermeasures and c

290、ontrols,a range of software applications for different regions and functions,and we periodically assess and implement actions to re-duce risks to our systems and disruptions to our information technology systems and business con-tinuity,a significant or large scale malfunction or interruption of our

291、 systems could adversely affect our ability to manage and keep our operations run-ning efficiently,and damage our reputation if we are unable to track transactions and deliver products to our dealers and clients.A malfunction that results in a wider or sustained disruption to our business could have

292、 a material adverse effect on our business,re-sults of operations and financial condition.In addition to supporting our operations,we use our systems to collect and store confidential and sensitive data,in-cluding information about our business,our clients and our employees.As our technology continu

293、es to evolve,we antic-ipate that we will collect and store even more data in the future,and that our systems will increasing-ly use remote communication features that are sensitive to both willful and unintentional security breaches.Much of our value is derived from our confidential business informa

294、tion,including car de-sign,proprietary technology and trade secrets,and to the extent the confidentiality of such information is compromised,we may lose our competitive ad-vantage and our car sales may suffer.We also col-lect,retain and use certain personal information,34BOARD REPORTFERRARI N.V.2023

295、 ANNUAL REPORT AND FORM 20-Fincluding data we gather from clients for product development and marketing purposes,and data we obtain from employees.Therefore we are subject to a variety of ever-changing data protection and pri-vacy laws on a global basis,including the EU General Data Protection Regul

296、ation.We expect that future generations of cars will feature an increasing degree of connectivity for pur-poses of infotainment,safety and regulatory compli-ance,and the increased demand for a“connected car”has led to increased digitization of car systems,the wide application of software,and the cre

297、ation of new,fully digital mobility services.This technology is capable of transmitting and storing an increasing amount of personal information belonging to our customers.These new features may increase the cyber security risk of our cars.Any unauthorized ac-cess to in-vehicle information technolog

298、y systems may compromise the car security or the privacy of our customers information and expose us to claims as well as reputational damage.In addition,third par-ties with which we contract could also be subject to external cyber-attacks.Should the third party be con-nected to our system,the cyber

299、attacker could poten-tially penetrate our information technology systems.Although we prioritize cybersecurity on all of our cars and when processing personal data,any signifi-cant compromise in the integrity of our data security could have a material adverse effect on our business.Cybersecurity is t

300、he object of increasing regu-latory updates and we will be required to keep our internal systems updated to comply with the new rules that may come into force.For instance,pursu-ant to the UN-ECE regulations,we will be required to maintain over time,and to periodically renew,the Cyber Security Manag

301、ement System(“CSMS”)to register and sell our cars,as well as to demonstrate that we are able to deal with,and aware of,potential cyber risks,both for our cars and for our enterprise.Failure to maintain the Cyber Security Management System Certification could result,for the countries where the regula

302、tions are applicable,in impossibility to homologate and sell new vehicles.OUR SUCCESS DEPENDS LARGELY ON THE ABILITY OF OUR CURRENT MANAGEMENT TEAM TO OPERATE AND MANAGE EFFECTIVELY.Our success depends on the ability of our senior executives and other members of management to effectively manage our

303、business as a whole and in-dividual areas of the business.Most of our senior executives and employees,including many highly skilled engineers,technicians and artisans,are re-quired to work from our offices and production fa-cilities in and around Maranello,Italy.If we were to lose the services of an

304、y of these senior executives or key employees,this could have a material adverse effect on our business,operating results and finan-cial condition.We have developed incentive plans aimed at retaining and incentivizing our senior exec-utives and employees,as well as management suc-cession plans that

305、we believe are appropriate in the circumstances,although it is difficult to predict with any certainty that we will replace these individuals with persons of equivalent experience and capabil-ities.If we are unable to find adequate replacements or to attract,retain and incentivize senior execu-tives

306、,other key employees or new qualified person-nel,our business,results of operations and financial condition may suffer.WE RELY ON OUR DEALER NETWORK TO PROVIDE SALES AND SERVICES.We do not own our Ferrari dealers and virtually all of our sales are made through our network of deal-erships located thr

307、oughout the world.If our dealers are unable to provide sales or service quality that our clients expect or do not otherwise adequately project the Ferrari image and its aura of luxury and exclusivity,the Ferrari brand may be negatively af-fected.We depend on the quality of our dealership network and

308、 our business,operating results and financial condition could be adversely affected if our dealers suffer financial difficulties or otherwise are unable to perform to our expectations.Further-more,we may experience disagreements or dis-putes in the course of our relationship with our deal-ers or upo

309、n termination which may lead to financial costs,disruptions and reputational harm.Our growth strategy also depends on our ability to attract quality new dealers to sell our products in new areas.We may face competition from other lux-ury performance car manufacturers in attracting quality new dealer

310、s,based on,among other things,dealer margin,incentives and the performance of other dealers in the region.If we are unable to at-tract new dealers in targeted growth areas,our prospects could be materially adversely affected.WE ARE EXPOSED TO RISKS IN CONNECTION WITH PRODUCT WARRANTIES AS WELL AS TH

311、E PROVISION OF SERVICES.A number of our contractual and legal requirements oblige us to provide extensive warranties to our cli-ents,dealers and national distributors.There is a risk that,relative to the guarantees and warranties grant-ed,the calculated product prices and the provisions for our guar

312、antee and warranty risks have been set or will in the future be set too low.There is also a risk that we will be required to extend the guarantee or warranty originally granted in certain markets for legal reasons,or provide services as a courtesy or for reasons of reputation where we are not legall

313、y obliged to do so,and for which we will generally not be able to recover from suppliers or insurers.CAR RECALLS MAY BE COSTLY AND MAY HARM OUR REPUTATION.We have in the past and we may from time to time in the future be required to recall our products to FERRARI N.V.2023 ANNUAL REPORT AND FORM 20-F

314、35BOARD REPORTaddress performance,compliance or safety-re-lated issues.We may incur costs for these recalls,including replacement parts and labor to remove and replace the defective parts.In addition,regula-tory oversight of recalls,particularly in the vehicle safety,has increased recently.Any produ

315、ct recalls can harm our reputation with clients,particularly if consumers call into question the safety,reliability or performance of our cars.Any such recalls could harm our reputation and result in adverse publicity,lost revenue,delivery delays,product liability claims and other expenses,and could

316、 have a material ad-verse impact on our business,operating results and financial condition.WE MAY BECOME SUBJECT TO PRODUCT LIABILITY CLAIMS,WHICH COULD HARM OUR FINANCIAL CONDITION AND LIQUIDITY IF WE ARE NOT ABLE TO SUCCESSFULLY DEFEND OR INSURE AGAINST SUCH CLAIMS.We may become subject to product

317、 liability claims,which could harm our business,operating results and financial condition.The automobile industry ex-periences significant product liability claims and we have inherent risk of exposure to claims in the event our cars do not perform as expected or malfunction resulting in personal in

318、jury or death.A successful product liability claim against us could require us to pay a substantial monetary award.Moreover,a prod-uct liability claim could generate substantial negative publicity about our cars and business,adversely af-fecting our reputation and inhibiting or preventing commercial

319、ization of future cars,which could have a material adverse effect on our brand,business,operating results and financial condition.While we seek to insure against product liability risks,insur-ance may be insufficient to protect against any mon-etary claims we may face and will not mitigate any reput

320、ational harm.Any lawsuit seeking significant monetary damages may have a material adverse ef-fect on our reputation,business and financial condi-tion.We may not be able to secure additional product liability insurance coverage on commercially accept-able terms or at reasonable costs when needed,par-

321、ticularly if we face liability for our products and are forced to make a claim under such a policy.OUR REVENUES FROM FORMULA 1 ACTIVITIES MAY DECLINE AND OUR RELATED EXPENSES MAY GROW.Revenues from our Formula 1 activities depend principally on the income from our sponsorship agreements and on our s

322、hare of Formula 1 reve-nues from broadcasting and other sources.See“Overview of Our BusinessRacingFormula 1”.If we are unable to renew our existing sponsorship agreements or if we enter into new or renewed sponsorship agreements with less favorable terms,our revenues would decline.In addition,our sh

323、are of profits related to Formula 1 activities may decline if either our teams performance worsens compared to other competing teams,or if the overall Formula 1 business suffers,including potentially as a result of increasing popularity of other racing events.Fur-thermore,in order to compete effecti

324、vely on track we have been investing significant resources in re-search and development and to competitively com-pensate the best available drivers and other racing team members.These expenses also vary based on changes in Formula 1 regulations that require modification to our racing engines and car

325、s.These expenses are expected to continue,and may grow further,including as a result of any changes in For-mula 1 regulations,which would negatively affect our results of operations.Compliance with the FIA Formula One regula-tions,which are periodically amended by the For-mula One Commission and the

326、n approved by the FIA World Motorsport Council,requires significant changes to our racing cars,processes and opera-tions.If we are unable to effectively adapt our cars to comply with changes in FIA Formula One regula-tions,our performance in races may suffer.These changes may result in adverse effec

327、ts on our reve-nues and results of operations.Starting from 2021,new FIA Formula One fi-nancial regulations have been introduced.These provide for a cap on spending for all chassis costs and expenses(excluding,among others,the activi-ties to enable the supply of the current power units,marketing cos

328、ts,drivers salaries and the top three personnel at each team)and a similar cap was intro-duced also for the development of the power units that will be used in the 2026 season and is applicable for spending starting in 2023.The budget cap for the 2023 Formula 1 season was 140 million in relation to

329、the development and manufacturing of the rac-ing car chassis and$90 million relating to the power units that will be used in the 2026 season.The afore-mentioned budget caps on spending are defined for each season based on several factors,including the number of races and inflation.The budget cap for

330、 the 2024 season is currently in the process of being defined but is expected to be higher than in 2023.The cap on expenses affects the amount of resourc-es that we are allowed to allocate to Formula 1 ac-tivities,with potential adverse effects on our teams performance if we are not able to optimize

331、 such resources.Because Formula 1 is key to our brand marketing,the FIA spending cap may also adversely affect our ability to support our brand through re-newed racing success.WE RELY ON OUR LICENSING AND FRANCHISING PARTNERS TO PRESERVE THE VALUE OF OUR LICENSES AND THE FAILURE TO MAINTAIN SUCH PAR

332、TNERS COULD HARM OUR BUSINESS.We currently have multi-year agreements with li-censing partners for various Ferrari-branded prod-ucts in the sports,lifestyle and luxury retail seg-ments.We also have multi-year agreements with franchising partners for our Ferrari stores and 36BOARD REPORTFERRARI N.V.2

333、023 ANNUAL REPORT AND FORM 20-Ftheme park.In the future,we may enter into addition-al licensing or franchising arrangements.Many of the risks associated with our own products,includ-ing risks relating to the image of the Ferrari brand and its aura of exclusivity,as well as to the demand for luxury goods,also apply to our licensed products and franchised stores.In addition,there are prob-lems that