Rolls-Royce Owner Donald Trump’s Tariffs Hammer U.K.’s Luxury Car Market
President Donald Trump’s recent imposition of aggressive tariffs on imported cars is poised to significantly impact the United Kingdom’s luxury car sector, potentially causing considerable damage to its lucrative export market.
The tariffs, set at 25% on cars and certain car parts, including engines and powertrains, aim to encourage domestic manufacturing and persuade foreign competitors to establish operations within the United States. This move has sent ripples of concern through the U.K.’s luxury car manufacturers, who depend on a considerable number of sales to wealthy American buyers, including President Trump himself.
The U.K.’s automobile sector is renowned for its luxury brands, including Bentley and Aston Martin, among others. These companies generate a substantial portion of their revenue from exports. Excluding Jaguar Land Rover, their combined annual revenue exceeds £6.4 billion ($8.3 billion).
Four out of every five cars produced in the U.K. are exported, and the U.S. is the largest single export market for the U.K., accounting for 17% of its total vehicle exports. In the previous year, the U.K. exported £6.4 billion ($8.3 billion) worth of vehicles and additional parts to the U.S.
While mass-market European automakers have already begun formulating strategies to overcome Trump’s tariffs, the situation is more complex for U.K. luxury carmakers. The brand’s legacy and the history behind their production are major contributors to their appeal, especially to foreign buyers. For example, Bentley has been manufacturing cars in Crewe, England, since 1946.
Rolls-Royce, a brand with President Trump among its clientele, constitutes only a small percentage of the BMW Group’s total sales. Every Rolls-Royce car is meticulously constructed at its Goodwood factory in Chichester. The company announced a £300 million investment in January to facilitate expansions in its customization capabilities.
Aston Martin, which shipped fewer than 2,000 vehicles to the Americas last year, generated $630 million in revenue from the region. Shares in the carmaker experienced a decline in early trading.
With limited alternatives, the U.K.’s luxury car market may need to pass the increased costs onto wealthy customers, hoping the exclusivity of their product will outweigh price considerations. Bentley’s CEO, Frank-Steffen Walliser, alluded to this recently, suggesting that rising expenses would likely affect consumers.
SMMT chief executive Mike Hawes expressed concern, urging the U.K. and U.S. authorities to engage in discussions to prevent tariffs that could harm both sides of the Atlantic.
“Today’s announcement by President Trump is not surprising but, nevertheless, disappointing if, as seems likely, additional tariffs are to apply to U.K. made cars,” Hawes stated. “The UK and US auto industries have a long-standing and productive relationship, with US consumers enjoying vehicles built in Britain by some iconic brands, while thousands of UK motorists buy cars made in America.”
