Friends hi-fi system not very good, what do you do or say?

Be humble. Be a good friend without being judgemental. To your friends ears, he may like his system, and does not require esoteric electronics to make him happy. My suggestion, enjoy your time with him and the music he likes. You might find some new ones you want to listen to again on your system .

I liked @norcalal response (there were many others as well), but his I thought was really functional and effective, and also a leading call to action for the friend.  I have been having a similar struggle with a relative who has a VERY NICE system, and a great sized room....but the sound is just barely mid-range and higher: there is no depth, no feeling, NO BASS AT ALL.  To me it sounded so bad that I literally couldn't listen for more than a few songs at a time.  To him, it was incredible and the best he has ever heard, and he's been an audiophile (legit) for over 30 years.

Age has a lot to do with it, sensitivities can have a lot to do with it for him, and frankly I think at some point people just like what they want to like and can't be turned unless led by themselves.  Which brings me back to @norcalal comment.  Encouraging the person to WANT to experiment will help them to simply discover on their own that things can in fact sound better even with just speaker placement moves maybe some furnishings, sitting position, etc.  That can 'usually' trigger wanting to test and tweak and hopefully LEARN all one can objectively to then apply subjectively.  In my situation with the family member, I had to show him REW measurements to illustrate what he was missing, what issues he had: objective.  For me, personally in my own system I try a lot of different things from time to time just to shift HOW what I hear sounds.  I'll turn off my subwoofer for a few days, change it's frequency cut off and volume, I'll do some tweaking with an EQ for the main system and change response curves,  use REW to record measurement of what I change and mark ones I really like and why, etc.  I also listen to a lot of live acoustic music of all kinds, in different spaces small and large. I am also blessed with muscian and other audiophile friends who help me to want to hear differently or help point out things I should be hearing that are present but I might over look.  

funny you would mention a lambo i have a Ferrari F430 and it has a HORRIBLE BOSE audio system and i know it ! ( I am 4th owner , i did not order it ! )
how they ever conned Ferrari into making it a very expensive option i had NO idea! the ONLY way to fix it is take out all the drivers and replace them w/ something decent -Like Focal ? or what ever 6" woofers in doors ,tweeters up by mirrors, and mids behind the seats ! ( I will use BMR drivers those, whilst modest $ are awesome and even used in some high end speakers! )
i had a friend Bruce Wilson ( RIP colon cancer GET a colonoscopy ! ) during after college and he owned a audio store Wilson audio in Tucson , AZ all of us knew OUR systems were crap as we would hang out @ his home and shop but he would always give us good deals on used, great prices on new if we wanted it . we did not have to say anything ! A guy usually knows the limits ! IF your friends ask you about their system say " what part of your system do you MOST want to upgrade? " agree w/ them, talk about it and try to find them good deal on a used or new one ! One friend said he wished he had better speakers and GR research had kit for his speakers so i suggested it he bought it and now yes he spent few hundred $ but the speakers are MUCH better and we are all smiling ! we all spent most of our $ on M/C’s! not audio ! back in day ! audio is my 2,3 rd hobby ! not first !

A good friend of mine knew I was into audio and he asked my about his system.  He was using Bose 301 loudspeakers and I told him he could do better.  Now he loves music as much as I do and he's also a good guitar player.  In his opinion the Bose loudspeakers could rock and he was happy.

I few months later I'm at an estate sale and there's a mint pair of Dynaco A25s for $40.  A few months after that I get good condition Pioneer SX434 for $20.  I give them to my friend.  He loves them, but he still kept the Bose.  He's not an audiophile.  He doesn't have a sweet spot and he doesn't worry about soundstage or imaging.  With his modest system he enjoys listening to music as much as anyone on this forum.

Kinda feels like a forced premise here, and in the subject title you refer to the individual as a "friend" whereas later it appears you’re not really acquainted with him.

Hasn't the OP already pretty much stated that this is another one of his imaginary scenarios that he likes to post, for some reason, in the amps/preamps forum?