Car import Tariff fixed at 15%

Eager to hear what approach Ferrari takes. If entire 15% becomes an add-on to MSRP, will seriously consider cancelling 12C and Purosangue orders (and eat the loss on non refundable deposits)…on top of the 10% California sales tax this gets meaningful amount going to government on sizable MSRP cars.
Excellent deal for the US administration and surprised the EU couldn’t even negotiate an exemption or special rate for their low volume items, such as makers of some relatively low volume cars and watches.

 

My dealer estimates 10% MSRP increase on new orders.

 

Will be interesting to see what Ferrari will do with cars on the water to the US and those that are in New Jersey which I have heard is about 500 to 600 cars.

 

That's a lot of expen$ive cars in one place! Hope they are all safe in warehouses given the recent weather experience in NJ this summer and the heightened risk of hail and flood damage for new cars in the wrong place at the wrong time.

 

There already was an additional charged based off the 25% tariff for the 12C and Puro, so given this is less than that I'd hope that they tariff charges are lowered on those models to reflect.

 

Exactly! Ferrari already instituted an 8.5% price increase on the 12C as a result of the 25% tariff. If they try to raise the price above the 8.5% given an overall 10% tariff reduction, then I will simply cancel my order. Ferrari already benefits from almost a $150,000 average profit margin on their cars (versus Porsche at roughly $25,000). Simply finding new ways to stick it to their customers is not cool. Ferrari cars are "nice to have", versus "need to have" items.

 

As has already been mentioned, 15% would apply on the price on arrival (i.e. before any cost or margin in the US, including dealer profit - so the 15% tariff should not increase the MSRP by 15%, but a lot less even if Ferrari pass it completely to the customers).
The EU is completely divided (each country looking only to its own concerns) so it's in a very bad position to negotiate consistently.

 

Not really. Even if produced here they still have a 50% tariff steel and a 25% tariff car parts not produced here plus whatever else (aluminum etc). It’s cheaper for manufacturers to build elsewhere due to the tariffs on materials alone.

 

The thing is - even if a company is "passing a tariff completely to the customer", they are actually losing money on it.

It's an expense they are spending real money on, so normally a company would expect a return on that money. If Ferrari pays $1,200 to a supplier for a wheel, they don't sell that wheel to the customer for $1,200, they mark it up.

So, in any normal business model a 15% tariff should increase the price of goods by more than 15%.

 

Nope. That's not how it works at all.

 

Well... Ferrari is a complex luxury product.

They need to have scarcity to justify their insane prices lately.

So they will have to choose a balance of price vs demand.

If like many on here say they will cancel their orders... Ferrari can't have the cars arrive on dealer lots and sit. It will ruin the brands reputation and it will cost the brand dearly in brand value which will affect the price and sales of the car.

They may have to eat some of it in order to maintain the status quo.

 

Agree. However, if they do build them here I hope there's a 1000% tariff on sticky buttons, forcing them to make quality ones here.

 

That's the funniest **** I've read in a while

 

And it’s still an uphill climb due to tariffs.

https://www.foxbusiness.com/markets/gm-profit-shrinks-despite-stronger-sales.amp