Ferrari Expected to Weather US Tariffs Unscathed
Ferrari is seen as a special case among Europe’s automobile sector, with the luxury carmaker expected to be shielded from the impact of US tariffs. President-elect Donald Trump’s proposed measures, including a 10% tariff on all Chinese products and a 25% tariff on all goods from Canada and Mexico, are likely to have significant consequences for US and European manufacturers. However, Ferrari’s exclusive production in Italy means it will not be affected by the tariffs.
According to equity analyst Rella Suskin at Morningstar, Ferrari can easily pass on any increase in prices to consumers due to its high-end customer base. “It’s ridiculous but that’s kind of the way it is,” she said. Tom Narayan, global autos analyst at RBC Capital Markets, echoed this view, stating that Ferrari appears to be in a position to pass on any price increases.
Ferrari has been outperforming its European peers this year, with its shares climbing over 34% year-to-date. The company’s unique position allows it to maintain its luxury image and customer base, even in the face of potential tariffs. In contrast, other luxury carmakers such as Porsche may struggle to pass on price increases to customers.
Porsche, which produces its luxury models in Germany, may be more vulnerable to the impact of US tariffs. According to Kepler Cheuvreux’s Thomas Besson, the prospect of additional US duties would be a “much bigger hurdle” for Porsche. While Porsche could potentially piggyback off its parent company Volkswagen’s spare capacity in the US, it would require significant investment to create a Porsche-specific production line.
Ferrari’s ability to weather US tariffs unscathed is a significant advantage for the company, allowing it to maintain its high-end brand image and customer base. As the global auto industry continues to evolve, Ferrari’s unique position will likely remain a key factor in its success.