① Trump has previously threatened to impose high tariffs on imported goods, causing concern in the european auto industry, but ferrari is an exception. ② Due to the insensitivity of ferrari's customers to price, ferrari may easily pass on the tariff costs and continue production in Italy. ③ In contrast, another luxury car brand, Porsche, may face greater tariff pressure and find it difficult to pass on all costs.
According to a report by Cai Lian She on November 29 (Editor: Liu Rui), after Trump won the election in the usa, the high tariff threat he had been voicing has posed a dilemma for many auto giants: the high tariffs will undoubtedly impact the global auto industry supply chain, leading to rising costs and declining consumer demand for car manufacturers, while also pressuring many manufacturers to shift production chains to the usa.
However, in the face of Trump's tariff threats, one european auto manufacturer feels no pressure at all — ferrari.
Is ferrari an exception?
To increase revenue in the usa, Trump had previously promised to impose a 10% or 20% tariff on all goods entering the usa, which raised concerns among many european auto manufacturers.
However, in the view of morningstar's stocks analyst Rella Suskin, even if the usa imposes tariffs as high as 30% on all goods imported from europe, it may not affect the purchasing willingness of ferrari's customers, nor compel ferrari to move its production line to the usa.
"Ferrari is an exception. No matter what the tariffs are, they will not start production in the usa. All (production activities) will take place in Maranello, Italy," said Suskin from morningstar, "In ferrari's case, even if the tariff is 10%, 20%, or 30%, considering their target customers and that the cars are already quite expensive, they can easily pass the tariff costs onto consumers... it sounds absurd, but that's the reality."
Tom Narayan, the global auto analyst at the royal bank of canada's capital markets, also agrees with this view, stating that even if Trump fulfills his promise to raise tariffs, ferrari indeed seems able to easily pass the burden of price increases onto consumers.
Thomas Besson, head of auto industry research at Kepler Cheuvreux, stated that most analysts and investors believe this Italian auto manufacturer is unique among its European peers, "Time will tell, but this is likely to be correct."
Ferrari's stock has performed strongly this year, outperforming many competitors in the European market. Since the beginning of the year, Ferrari's stock has risen by 34%, significantly higher than France's Renault or Germany's Mercedes-Benz Group.
Auto analyst Anthony Dick from Oddo BHF also stated, "We expect Ferrari will not establish a production base in the USA... for brand reasons, but also (possibly more importantly) industrial reasons, as this would require the group to establish a local supply base, which we believe is not feasible."
Dick noted, "At this stage, it is unclear how tariffs will affect demand, but it can be reasonably assumed that Ferrari's customers are less sensitive to price than most customers." He pointed out that several other luxury car competitors of Ferrari will also face similar tariff treatment.
Porsche has not been so fortunate.
Like Ferrari, which exclusively produces cars in Italy, Porsche, under the Volkswagen group, traditionally produces luxury models in Germany. However, in the eyes of analysts, Porsche, as a luxury car brand, is not as fortunate as Ferrari when facing tariff pressures.
Besson from Kepler Cheuvreux stated that Trump's tariff plan may pose "a bigger obstacle" to Germany's Porsche.
"Porsche is a bit different," said Sazkin from Morningstar, "They can pass on 10% tariffs to consumers, but higher tariffs, such as 30%, may be more difficult to pass on to consumers."
They can leverage the parent company, volkswagen, which does have some idle capacity in the usa, but they need to invest a considerable amount (capital expenditure) to create a production line specifically for ferrari.
