Because of ultra-high net worth (UHNW) customer base, luxury automakers such as Ferrari (race) may rise with tariff prices, but even those wealthy buyers may have restrictions.
Often, UHNW buyers won’t be discouraged by rising prices; when demand for products is strong or supply is limited (such as during the pandemic), they are willing to pay premiums for products like Rolex watches, exquisite Scotch whiskey, and of course Ferrari sports cars.
That's why Maranello-based Ferrari did not reduce or completely withdraw its profit guide for the year in the latest earnings report. Management said the Italian automaker did say profit metrics such as EBIT and EBITDA margins could be hit by 50 basis points, depending on how President Trump’s trade war performed, although the likelihood of “offset” in operations could reduce the impact. Currently, foreign automobile imports are subject to a 25% tariff.
In response, Ferrari's pricing strategy is worth noting, twice as much.
For its super premium cars, such as the $1 million-plus Daytona SP3, the upcoming F80 HyperCar and the new 12Cilindri Coupe, the company will increase its price by up to 10%. The idea is that these buyers will pay at least some tariffs (in some cases an additional $100,000) because this "marginal" amount won't stop them from buying a limited edition Ferrari. All buyers of these high-end Ferrari are multi-repetitive customers and usually don't brag when Ferrari asks.
For low-priced Ferrari cars like the Roma Coupe, 296 sports cars and SF90 hybrid sports cars, the company will keep prices stable. The idea here is that these buyers are more price-sensitive and Ferrari faces more competitors, including Aston Martin, Bentley (Vwagy) and Ferrari regional rival Lamborghini (Vwagy).
Ferrari CEO Benedetto Vigna said his clients like two aspects of Ferrari's pricing strategy.
"First, we have been clarifying what we intend to do immediately; second, we have contributed, we have contributed to this price increase," Wigner said on a Ferrari analyst call.
"We don't ask them to pay all the bills, but we're very clear about it (they) that some models won't go up, some models will be up...up to 10%. So they're very grateful for it."
Wigner said the company will remain "warm" about changes in purchasing behavior, but the company has not yet taken any shifts after a timely visit.
Lamborghini also reported outstanding results for the first quarter, although it pointed to the “uncertain” background of international trade. The company said it will "closely monitor the situation and evaluate the potential scenarios and impacts on the business in the future", but for the moment, the business remains robust for future sales.
A Lamborghini spokesman said the automaker will not discuss pricing at this time, and others said the automaker is "carefully evaluating all possible situations".
Ferrari and Lamborghini both performed well compared to the first quarter of last year, with revenues rising 13% and 30% and EBIT rising 23% and 33% respectively.
One area Lamborghini highlights is the advantages of its major commercial regions – the Americas, Europe and Asia (Europe and Middle East) and Asia – and although the United States remains its highest market, it can spread the risk of trade tensions.
Like Lamborghini, Ferrari has a strong influence in many key areas, with a large number of wrinkles that are beneficial to it: they are less dependent on China. Lagging Chinese sales have hit other luxury brands, including Mercedes, BMW and Audi.
Wall Street is adding Ferrari’s game plan, which hits tariffs and restricts exposure to China.
Morgan Stanley’s Adam Jonas reiterated the bank’s overweight rating on the stock, citing Ferrari’s “unique positioning, defensive business”, with the order book extending into 2026, relatively low with relatively low volatility to earnings, while strategic regional exposures, such as China, are at lower risk.
"We don't know there are any other global luxury brands with low contact with Ferrari close to China," Jonas wrote. "We believe that the company's strong pricing power (super quality luxury consumers) and low exposure to China (big Chinese goods account for 6.6% of total shipments) provide relative security, while our coverage comes with many other names."
High net worth consumers, with low exposure to China, and the unexpected "defensive" business in an uncertain economic environment may be the key to Ferrari's success.
“Despite the surge in uncertainty and volatility, our vague business model provides us with solid confidence and necessary agility for the future,” Ferrari Chief Financial Officer Antonio Picca Piccon said on the revenue call.
Pras Subramanian is a reporter for Yahoo Finance. You can follow him x Then continue Instagram.
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