As President-elect Donald Trump renews his calls for steep tariffs on imports from China, Canada, and Mexico, the global auto industry braces for potential supply chain disruptions and rising costs. However, Ferrari, the iconic Italian luxury automaker, appears uniquely positioned to weather the storm, even as other manufacturers face mounting challenges.
Trump’s proposed measures include a 10% tariff on all goods entering the United States from China and a 25% tariff on imports from Canada and Mexico, triggering concerns across industries that rely heavily on global trade. While European automakers have yet to be directly targeted, analysts suggest it may only be a matter of time before the spotlight falls on the European Union’s automotive sector.
Despite the growing uncertainty, Ferrari seems largely insulated from the fallout. Known for its exclusive, high-performance vehicles, the Italian automaker manufactures all of its cars at its historic factory in Maranello, Italy. Unlike many global automakers with production facilities scattered across different regions, Ferrari’s singular approach to manufacturing allows it to maintain its brand identity and avoid the complexities of shifting production to circumvent tariffs.
“For Ferrari, tariffs won’t push them to make cars in the United States. Everything happens in Maranello,” noted Rella Suskin, an equity analyst at Morningstar, in a discussion with CNBC. Suskin explained that Ferrari’s customer base is less sensitive to price increases compared to mainstream brands. “Whether it’s a 10%, 20%, or even 30% tariff, Ferrari could easily pass those costs on to consumers,” she added, citing the high-income demographic that typically purchases Ferrari vehicles.
Ferrari’s ability to absorb potential tariffs stems from the exclusivity of its brand and the premium nature of its product. Luxury car buyers are less likely to be deterred by incremental price hikes, a sentiment echoed by Tom Narayan, global automotive analyst at RBC Capital Markets. Narayan emphasized that Ferrari’s pricing power allows it to navigate challenges that might significantly impact competitors.
The Italian automaker’s resilience is further underscored by its strong market performance. Ferrari shares, traded on the Milan stock exchange, have soared more than 34% so far this year, outpacing rivals such as Renault and Mercedes-Benz. Analysts attribute this growth to Ferrari’s ability to maintain high demand for its vehicles while staying independent from market volatility affecting mass-market automakers.
“Ferrari doesn’t need to produce cars in the United States,” said Anthony Dick, an automotive analyst at Oddo BHF, in an email to CNBC. “From a branding perspective and for industrial reasons, setting up a local supply chain in the U.S. doesn’t seem feasible for the company.”
Ferrari’s steadfast commitment to manufacturing exclusively in Italy not only preserves its brand’s heritage but also eliminates the need for significant capital investments required to establish production facilities abroad. This strategy stands in sharp contrast to many automakers that have diversified their manufacturing operations to mitigate potential trade barriers.
For other European luxury carmakers, however, the impact of U.S. tariffs could be more pronounced. Porsche, for instance, faces a different set of challenges compared to Ferrari. The German automaker, owned by Volkswagen, builds its vehicles in Germany and may struggle to pass on the full cost of steep tariffs to customers.
“Porsche’s situation is a bit more complex,” Suskin explained. While a 10% tariff might be manageable, a higher rate—like 30%—could be difficult to absorb without impacting demand. Unlike Ferrari, Porsche’s parent company Volkswagen has some production capacity in the United States, but creating a dedicated Porsche production line would require significant capital expenditure.
Porsche shares have reflected these challenges, falling approximately 26% this year. Analysts have pointed out that the company’s reliance on German production, combined with its broader customer base compared to Ferrari, could make it more vulnerable to U.S. trade policy changes.
Meanwhile, Ferrari’s focus on exclusivity and its ability to command premium prices have set it apart from the rest of the industry. Analysts like Thomas Besson, head of automotive research at Kepler Cheuvreux, agree that Ferrari’s unique market position enables it to navigate economic headwinds with relative ease. “Time will tell, but for now, Ferrari seems well-equipped to handle these challenges,” Besson told CNBC in an email.
Trump’s tariff proposals have already sent ripples across the global auto market, with stocks of several automakers declining in response to the news. Many U.S. and European manufacturers rely heavily on parts suppliers and assembly plants in Mexico, making them particularly vulnerable to disruptions in cross-border trade. Even automakers that are not immediately affected by Trump’s policies, such as those in Europe, remain wary that future measures could target their operations.
Despite these broader concerns, Ferrari’s strong brand identity and its ability to cater to a wealthy, less price-sensitive customer base give the company a significant advantage. Its steadfast commitment to Italian manufacturing ensures that it remains a symbol of exclusivity and heritage, qualities that resonate strongly with its clientele.
While the global auto industry continues to grapple with uncertainties surrounding tariffs, Ferrari’s strategy appears to shield it from the worst of the fallout. As the company continues to thrive, its approach serves as a stark contrast to the challenges facing other automakers, reinforcing its status as a unique force in the luxury automotive market.
