When Luca Cordero di Montezemolo returned to save Ferrari in the 1990s, he had three priorities — the team, the technology, and the myth — and the most transformative insight was recognizing that Ferrari was fundamentally a luxury company, not just a racing company, requiring him to study and adopt luxury strategy from houses like Hermès.

94:29tough time for Ferrari here in the 70s. The oil crisis is underway. Any car with an engine size over 2 L was taxed at an incremental 40% in Italy and throughout much of Europe. The whole sports car industry is basically in the dumps. So Luca reports all this back to Enzo and Enzo's like, "Okay, great. You passed your first test. Things aren't good on the road car side of the business, but

94:53like at the end of the day, that's Fiat's problem now." Okay, my real assignment for you. I want you to go to the next Formula 1 race. Just go just observe. Just tell me what you think is going on with the team. Yep. Now, at this point here in like 197374, things are really bad for the Ferrari F1 team. They haven't won a drivers or constructor's championship for 10 years.

95:22A historic drought for Ferrari. So, Luca goes, he observes a race and he calls Enzo up and he says, "Hey, look, I advise that we just take the cars home and we don't race them. We have no chance of winning." O" And Enzo's like, "Okay, okay. Well, we're not going to take them home, but we need to get competitive again. What What are we going to do? And Luca's like, the issue

95:44is that the sport has changed. This isn't just an engine sport anymore or power. >> We're now in the era of Colin Chapman and Lotus and >> aerodynamics. >> Aerodynamics and the chassis is way more important. And the Ferrari team is stuck focused 100% on the engine. Like, we have no chance of winning. So Enzo says, "Okay, here's what I'm going to do. I'm going to make you, Luca, the team

96:11manager of the Ferrari Formula 1 team, and your mandate is to fix this. I can't fix. I'm Enzo. I'm like the engine guy. You go in, you can be the new blood. You can fix this." >> And this is amazing because this is quite the quick promotion for Luca. I mean, it's like a guy he found that he brought in to be his assistant. I mean, he was much more than an assistant, but

96:34that was his title. >> Yeah. He's not even 30 years old yet. >> Then suddenly, you're managing the Formula 1 team, which historically is the driver that creates all the lust that sells the cars. Like, this needs to start working. >> Yes. Oh, Luca has this great great quote on the nature of the connection between Ferrari's performance on the track and the business selling road cars. He says

96:58there is not a direct correlation between Ferrari victories on the track and the number of cars that you can sell. But if for many years you do not win, it means that you do not add wood to the fire of the myth. >> The myth of Ferrari is based on competition on cars. In the competition, you can win or you can lose, but you cannot only lose. It's so perfect.

97:23>> It is perfect. So Luca comes in as team manager and he revamps the team. He brings in great chassis folks. He brings in great aerodynamic folks. And the most important thing, he goes out and recruits Nikki Laua to come in as their number one driver. And in 1975 with the new team, the new approach, Luca's manager, Nikki Laua wins the drivers championship for Ferrari. And Ferrari