A boom in personalised cars from super-rich customers may shield luxury car maker Rolls-Royce from some of the worst effects of the 25 per cent tariff on car imports to the US – but will still have an impact.
The company, like many of the UK car manufacturers hit by the blanket tariff, is remaining fairly quiet while it fully digests the implications.
It said: 'We are currently evaluating the announcement in detail and ask for your understanding that we are unable to comment further at the moment.'
However, the luxury car-firm based at Goodwood in West Sussex is hoping its super-rich clients in the US – choosing increasingly bespoke, individual, and one-off models - will be able or willing to absorb the increase posed by the tariff.
The degree to which that happens will determine the size of 'hit' Rolls-Royce is likely to take.
Its Ghost model starts from a base of £255,000 - a 25 per cent hit for US customers would add nearly £64,000 to the price.
Meanwhile, its new Black Badge Spectre is priced from £320,000 - an extra 25 per cent would equate to an £80,000 premium for US customers.
Tariff shock: The recently launched Rolls-Royce Black Badge Spectre starts from £320,000
Another concern will be that wealthy customers simply defer a purchase – in the hope that the tariff will be removed or reduced in due course or when President Trump leaves office, which will affect production cycles, cash flow and profitability.
North America is Rolls-Royce Motor Cars' largest sales region accounting for around a third of total sales.
Rolls-Royce chief executive Chris Brownridge has stated previously in advance of the Trump tariffs: 'If you put a tariff on the price of a good, it's going to have some impact on the demand.
'And if it's a luxury good, there could be higher price elasticity. That's certainly what I'd expect at Rolls-Royce.'
He has also stressed: 'We're not dependent on any one market, we have clients in every corner of the world, and that's the way we run our business.
'But notwithstanding that, the US is a really important market for us and I think we're in a great position irrespective of what happens with tariffs.'
If demand for its cars is relatively inelastic – that means that an increase in price has less effect on the demand for its products – then it will fare better than other car-makers where the effect of a price-hike is more sensitive and likely to lead to a big drop in orders.
A record boom in customers buying highly-personalised Rolls-Royce limousines has already led to a £300million expansion of its boutique factory to boost production of bespoke and electric vehicles.
A total of 5,712 Rolls-Royce motor cars were delivered to customers 2024 – the third-highest annual sales figure on record and a fall of 320 or 5.3 per cent on last year's record 6,032 motor cars to wealthy clients, the company announced in January.
A record proportion of the total were built to order as Bespoke models carrying a lucrative premium far in excess of their base price – including a specially commissioned one-off Arcadia limousine costing £25million and believed to be the world's most expensive car.
The firm has said previously that personalised bespoke extras can double the final price of a car.
An independent study by the London School of Economics in 2023 reported that Rolls-Royce has contributed more than £4billion to the UK economy since 2003 and adds more than £500million in economic value to 'UKplc' every year.
However, a 25per cent tariff hike on any Rolls-Royce will mean a hefty increase on list prices for customers – ranging from tens and hundreds of thousands to many millions of pounds.
A new electric Black Badge Spectre currently starts from £320,000.
A Rolls-Royce Phantom starts from around £450,000 bur most buyers pay far above that by adding bespoke detailing.
Limited edition Phantoms can cost between £1million and £2million while a one-off highly crafted coachbuilt car can cost up to £20million or more and take up to five years to complete from initial inception to delivery.
The BMW Group, which owns Rolls-Royce and Oxford-based MINI in the UK said on Wednesday, ahead of the Trump tariff confirmation: 'Free trade and international cooperation are of immense importance worldwide and are essential drivers of growth and progress. They have always been a guiding principle of the BMW Group.
'We should be discussing reducing trade barriers rather than creating more. The BMW Group remains committed to reducing tariffs and trade barriers between the EU and the US, which would benefit consumers in both regions.'
It added: 'The EU and the US are the world's largest trading partners — which brings great responsibility to both sides: A trade conflict between these economic regions would not have any benefits.
'Both sides should therefore promptly find a transatlantic deal that creates growth and prevents a spiral of isolation and trade barriers.'
BMW has paused plans for its electric Mini production at the Oxford plant with electric vehicle sales in the EU dipping by 5.9 per cent last year.