Donald Trump is perhaps a fan of Rolls-Royce-but his prices shape the love story of America with the European property of luxury cars.
Analysts told BI that European store brands are faced with a price hammer price of 25% of Trump on imported vehicles, the prices of luxury status symbols such as Ferrari, Rolls-Royce and Aston Martin practically guarantee to increase.
Trump suddenly interrupted many of his so-called “reciprocal” rates for 90 days on Wednesday, but the price on imported vehicles remains in force.
The British brand JLR, which manufactures Jaguar sports cars and Land Rover off-road vehicles, told Bi that it had taken a break for the United States this month, because it took stock of the prices, while the luxury manufacturer belonging to VW Audi would hold cars in American ports.
Other luxury brands have already indicated that they would increase prices in response to commercial wars.
Last month, Ferrari announced that it would increase prices by almost all its vehicles up to 10%, adding tens of thousands of dollars at the cost of many of its supercars.
Analysts have told BI that all car manufacturers face a period of disruption through prices – but that confusion will be amplified for specialized European companies such as JLR, Aston Martin and Ferrari, which have no factories in the United States where they can change production.
“This is very bad news. There is no bypass. They cannot absorb all the cost of a price of 25%, so this will have to be transmitted to customers,” said Tim Urquhart, main car analyst at S&P Global Mobility.
The high-end buyers of Bentley, Rolls-Rysces and Ferraris should expect to take the greatest success. Urquhart said that brands of the upper end of the luxury market had more flexibility to reflect customer costs due to their already high sticker prices.
“I am sure that Rolls-Royce and Bentley will probably transmit a greater percentage of the price on customers than BMW, Mercedes and Porsche,” he added.
Aston Martin did not respond to a request for comments. A Bentley spokesman said that the company did not intend to suspend imports in the United States and had not made a “firm decision” on the advisability of increasing prices, while Rolls-Royce said that she was still assesing prices.
Other brands at the lower end of the market can cope with pressure to reduce their vehicle ranges in the United States or lead more accent on other markets, as prices make vehicle sale in the United States unaffordable.
“I think there is this risk. I think if they can find other markets far from the United States, then they can do so,” BI Philip Nothard, strategy and insight to Cox Automotive, told BI.
Last week, Bloomberg said that Mercedes-Benz was planning to withdraw some of its entry-level vehicles from the American market due to prices.
Racking back from the United States would be a blow. The United States is a crucial market for luxury manufacturers, with European cars like BMW, Mercedes and Rolls-Royce traditionally serving as a symbol of status for rich and powerful-including Trump.
In recent years, the American market has become an important source of growth for many European giants, with sales in Europe and Chinese.
German automaker Porsche said on Tuesday that sales in North America increased by 37% in the first quarter, even though they fell 42% and 10% in China and Europe.
It is unlikely that the construction of new factories in the United States will contribute to the prices to provide an easy outcome.
“If they need to move their manufacture in the United States to navigate the price, it is not fast, and it is not cheap. So, whatever the solution to navigate the prices, this is not a quick solution,” said Nothard.
“You cannot just set up production factories and a supply chain and work overnight,” he added.
The growing trade wars reinforce things, even for manufacturers who already have factories in the United States.
In a research note sent to customers on Monday, UBS analysts said that the China’s recovery reprisal rate on US exports, which was announced last week, would have a major impact on BMW and Mercedes.
The two companies export large SUVs built in their American factories to China. Based on figures for 2024, UBS analysts estimated that Chinese prices could cost BMW around $ 650 million and Mercedes nearly $ 2 billion.
Since UBS has published this research, China has increased its 84%American export rate, which means that the blow would probably be even more substantial.
businessinsider
