Impact of Auto Tariffs with Chris Bryant, Battle Over Bugatti

Bloomberg Opinion columnist Chris Bryant joins the podcast to talk tariffs. Plus, the battle over Bugatti shaping up between Porsche and Rimac, and how Ferrari and Aston Martin are chasing hypercar glory.

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Episode Transcript

Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. I'm Matt Miller and
I'm Hannah Elliott and this is hot Pursuit.

Speaker 2 (00:21):
I guess to see you. It's great to see you.
Do you look fantastic? Oh?

Speaker 1 (00:24):
Thanks?

Speaker 2 (00:25):
I don't know if my zoom for some reason, I
look very red.

Speaker 1 (00:28):
I'm not, it's just the lighting.

Speaker 2 (00:32):
What uh what a day yesterday, today, probably tomorrow. Like wow,
these tariffs, I mean, this new world order.

Speaker 1 (00:44):
It's exhausting. It's I mean, my nerves are shot.

Speaker 2 (00:49):
From my point of view as a journalist, like so exciting,
you know, But I look at my four oh one
k and I'm like.

Speaker 1 (00:56):
No, I know, I know. I can't believe that, Like
they went through with it. He went through with it
because we've been hearing about this is gonna happen, and
he kind of like, ah, right, well we'll see because
everything has been so volatile anyway.

Speaker 2 (01:09):
Everyone was actually did it. Everybody was like, you know,
it's so surprising, And I'm like, what he's been telling us.

Speaker 1 (01:15):
The whole time, you know, that really doesn't mean much.

Speaker 2 (01:18):
Sometimes I always think of the Far Side cartoon where
the two people are looking up at the billboard of
the the two sheep are looking up at the billboard
of the wolf, and one sheep says to the other,
I like him because he says what he's thinking. And
and the wolf is saying, I'm going to eat you.
You know, Yes, I love He's been he's been telling
us like he's going to eat us. And here here

(01:40):
it is. It's incredible.

Speaker 1 (01:44):
Yes. So I spent the whole week leading up to
this writing a story about how classic car collectors and
brokers and shippers and logistics specialists and legal authorities, we're
all freaking out because going into the Trump had not
announced any exemptions and had said specifically there will be

(02:06):
no exemptions on the twenty five percent automotive tariffs that
he was going to enact effective April third, which is today,
and that goes for cars and parts coming into the country,
a flat twenty five percent tariff.

Speaker 2 (02:23):
So have won unless their USMCA compliance, yes, and in
which case they will be taxed only on the percentage
of parts that are not American.

Speaker 1 (02:35):
So if a car is coming in with twenty five
percent US parts, it'll it'll be taxed on the rest,
It'll be taxed on the seventy five percent that are
not American. All that to say, there wasn't any exemption
written in for classic cars, which would have been a
really big deal because that means that if you're buying
something at r M Sotheby's upcoming sale in Milan, like

(02:56):
you've got a Aston Martin that you've got your eye on,
like our Steve Sarah told me that tax on another
twenty five percent to what you're going to pay, and
that kind of kills the deal because why would you
pay that premium? You just wouldn't. It also meant that
people who were going to consign cars to sales in
the US, to auctions or whatever, especially in Monterey, we're

(03:17):
pulling their cars already from the auctions because why would
you pay another twenty five percent to sell your car?
Just doesn't make sense. The good news is, as of
yesterday afternoon, I did see some guidance that was sent
around to from customs to shippers that said that there
will be an exemption for cars that are twenty five

(03:41):
years or older. Now that doesn't mean that cars that
are fifteen years old won't also be tax which is
kind of tough because what about the cool Mercedes and
jdms that we want to get over here to collect
They're still collectible, they're just not old. So that's it
cars exactly. So that's kind of an issue. But the

(04:03):
flip side of that, which is kind of good for us,
is that potentially it means that any of these collectible
cars that are already in the US are going to
be worth more because if we if we if the
importation of these cars slows down, it's kind of good
if we already have our own collectible cars.

Speaker 2 (04:22):
Well, so there's there's a lot of moving parts here.
But basically, so classic cars will not be they will
be exempt from the twenty five percent auto tariff that
goes into effect today. We're recording this on April third.

Speaker 1 (04:38):
Yes, if they're older than twenty five years old.

Speaker 2 (04:41):
If they're older than twenty five years old, they will
be exempt from that twenty five percent tariff. If they're
coming from Europe, for example, they will still be subject
to a two and a half percent tariff.

Speaker 1 (04:52):
Yes, and that has always been the case.

Speaker 2 (04:54):
Yes, And but my question is on Saturday, when the
ten percent blanket tariffs go and to effect, I guess
those will apply to classic cars as well. And then
on Wednesday, when the additional tariffs go into effect twenty percent.
For example, on the EU, are those going to hit
like classic car if you import like a nineteen sixty

(05:16):
four nine to eleven from Stuttgart, are you going to
have to pay next week at the end of next week,
you know, basically twenty or thirty percent on that car.

Speaker 1 (05:27):
The answer to that is no to my as of today,
to my best understanding, because I did read the executive
order that was released yesterday when they are talking about
the reciprocal tariffs, right, and that order said some goods
will not be subject to the reciprocal tariff. These include
steal in aluminium articles and autos. Automotive parts already subject

(05:51):
to tariffs. So at least with the reciprocal tariffs, autos
and automotive parts will not be subject. Now when the
flat ten percent, that's a little unclear. That's a little unclear.

Speaker 2 (06:04):
I guess I need to plast the two and a
half percent that currently.

Speaker 1 (06:08):
See that's a good question.

Speaker 2 (06:09):
Wow, so a little bit confusing, But for the most part,
it does look like exemptions if you're buying cars over
twenty five years.

Speaker 1 (06:17):
Old, and yeah, I mean that's not me, but it
it's a lot of people.

Speaker 2 (06:21):
Well you might what if you find a car.

Speaker 1 (06:24):
There are great marks overseas, they're all right hand drive.
But that's fine. I can get behind it. I will say.
I talked with one shipper told me at at Silver
Tiger Logistics. He said they bring over about a thousand
cars a year and they regularly have flights that the
value of the cars on the single flight is over
one hundred million dollars. Wow, So this is this is

(06:47):
I mean, it seems niche, but it's a lot of
money and a lot of goods that would have been
subject to this.

Speaker 2 (06:54):
Yeah. I mean, by the way, I was at the
Moto GP races in Austin last weekend and it strikes me,
and I'm sure you see this another for example, a
Formula one. It strikes me that if you've got it
down to a science, packing up and shipping vehicles is
so easy completely. They've they've got boxes like already built

(07:17):
and they just roll the chassis in, you know, sinch
it down, close the box and it goes into a
container perfectly.

Speaker 1 (07:25):
So completely, like theoretically you could have it done with
a single phone call.

Speaker 2 (07:30):
Right. Well, I'm just saying, like Silver Tiger or.

Speaker 1 (07:32):
Yes, yes, our cars cars.

Speaker 2 (07:35):
They do it all the time, so yes, constantly. For them,
it's not a big deal. If you're one person and
it's the first time you've ever done it, then it's
kind of a pain. But if you're doing regularly, yeah,
so very interesting stuff. We're going to talk by the way,
to Chris Bryant, who is a Bloomberg opinion writer and
one with whom I worked for many years in Berlin.

(07:57):
Very smart guy.

Speaker 1 (07:58):
That's so cool. I I still need to go to Berlin.
I've never been, but yeah, Chris Brian is one of
my favorite columnists at Bloomberg. He's I read is. I
have notices attached to his column so I read them
whenever they come out. And he's really good at tying
in the business side, the product side, putting it all
in context. And yeah, he's he's great.

Speaker 2 (08:20):
I've been struck by his columns lately. I've been struck
by his his knowledge of these kind of niche products.
I mean, you are a hypercar expert, because that's your job,
but Chris is like an editorial writer for a financial
news organization, so it's pretty cool that he knows. For example,

(08:41):
you know that the Valhalla has much improved interior, you know.

Speaker 1 (08:45):
So, yeah, yeah, you know what I like too. I
firmly believe that the products of any given automotive company
speak to the company. So when you get into a
certain product and your note seeing things, those are a
direct They're a distant, but they're a direct result of
what is happening within the company structurally and financially, and

(09:11):
you can draw a straight line. And when I read Chris,
he completely clarifies what's going on internally at the company
that I see in the product. I mean, there is
a correlation. And it's so cliche to say, but there's
a direct correlation between what is going on within the

(09:32):
behind closed doors at certain companies and the end product.
And that's always true.

Speaker 2 (09:38):
Yeah. Absolutely, I've been loving his stuff lately as well.
I too have an alert set on my Bloomberg so
that I can get his column sent directly to me.
Let's get into it, Chris Bryant from Berlin.

Speaker 1 (09:50):
Chris, thanks for joining us. I want to go right
into your column today me too.

Speaker 2 (09:55):
I'm so glad you wrote that. And this is the
first time I actually understand the ownership structure of Porsche, Bugatti, Remac.
I've never gotten so acusing and so weird.

Speaker 1 (10:07):
Yeah, I mean, can I just jump in and ask
for me the biggest question, which is I don't think
Porscha needs Bugatti, and I feel like that's kind of
where you landed in your column. But I don't see
what Bugatti gives Porsche at this point.

Speaker 3 (10:22):
Well, I mean it's a topic that I was wrestling
with and just to catch catch people love. I mean,
you know, there's now sort of discussions basically that that Martirimac,
this amazing Croatian entrepreneur, would like to, in conjunction with investors,
maybe take over the half of Bugatti Remac that Porsche own.

Speaker 4 (10:42):
And I don't know. I mean, Porscha's really under pressure.

Speaker 3 (10:45):
They need to be more luxury, they need to sell
more expensive vehicles, and they have this amazing asset that
they never talk about, that you kind of never really
hear very much about. And Martima has been getting on
with the job for the last three four years and
then suddenly, yeah, these tensions have emerged, and you know,
it seems like Porscha maybe wanted to take over the
joint venture and now maybe he does, and it's all

(11:08):
a bit unclear, but I just can't help thinking out
They've got this this great asset that produces vehicles that
you know, highly sought after that people have to you know,
a clamor to get hold of, and then they might
sell it.

Speaker 4 (11:20):
I mean, I don't know.

Speaker 3 (11:22):
I did come down on the on the side of
the argument, yeah, that maybe they maybe they should just
because there aren't enough commonalities with the rest of the
Porsche business and making hyper cars we can talk about that,
the economics of that are not always great.

Speaker 1 (11:34):
Well, let me ask you really pointedly, what is your
sense about Porsche's plan to develop the hypercar success or
something in addition to the nine eighteen Spider And is
there a sense that Porsche had hoped to leverage Bugatti intelligence, infrastructure,

(11:57):
whatever else in order to develop the new hyper which
obviously we haven't seen and has sort of disappeared.

Speaker 3 (12:03):
Yeah, we've not seen it, right, I mean, I think
the original plan for Porscho was, you know, we saw
this mission acts hypercar that they developed, an all electric
hypercar that I think they showed a couple of years three. Yeah,
back then it probably seemed like a smart idea. Of course,
now you know, a lot can happen in.

Speaker 4 (12:20):
A couple of years.

Speaker 3 (12:21):
And even Marty Rimack, who developed the Remagnivera, which you know,
broke all kinds of records as a all electric hypercar,
had some comments last year along the lines as well,
it's not really selling as much as we hoped. Many
of the customers in this in this bracket who were
buying a you know, a seven car, they you know,
they feel that electric hypercars like the kind of emotion.

(12:43):
They still want to combustion engine all the rest of it.
And you know, even hinted that he might not develop
another one. And so if I was Porsche probably looking
at that space now, I might have reservations about bringing
in all electric hypercar to market. And therefore, you know,
if they have to go back to the drawing board,
then it could take a long time.

Speaker 4 (13:01):
And that's why you.

Speaker 3 (13:03):
Know, some people thought, well maybe Bogat you could help
fill that gap. I mean, if they if they took
control of that joint venture, then they sort of instantly
have a hypercar in the portfolio. They wouldn't have to
develop a new one. And Hannah, I think you were there,
like the new Toboon is very impressive vehicle.

Speaker 1 (13:18):
Now, yeah, it's it's amazing, and I think they've sold out.
And yet just as you say, you know, Remec and
let's not forget Peninferina with their electric Batista, which is
also using REMAT components, Like now is not the time
to be selling an electric hypercar. My question for Portie

(13:39):
is why do they not pivot to a hybrid, you know, supercar,
something like their nine to nineteen, the lemm prototype that
they've already developed. Why not just move that into production.

Speaker 2 (13:54):
Hybrid too? Right?

Speaker 1 (13:56):
Yeah, I mean to me that that would make a
lot of sense. And from you know, what I hear
on the ground from collectors is that Porsche was accepting
statements of intent and really trying to drum up buyers
for this mission X, this hypercar. Now. I asked last year,
I asked Porsche, what's going on, what's the latest? Can

(14:18):
you confirm or deny? And of course they don't want
to confirm or deny where they are in the program,
but they did say, we've never accepted deposits because what
we showed in twenty twenty three was only a concept,
you know. Therefore, they have plausible deniability that it's not
like they canceled anything. If they didn't commit to anything
in the first place. But if you talk to you know,
high end buyers and collectors, they all say, oh, yeah,

(14:41):
Porche's been trying, Porscha's been, you know, offering me allocations
for this, and I didn't want it because it was electric,
which takes the question, then why not simply pivot and
make it a hybrid, because they've already got a hybrid
prototype that you know, has the numbers for it.

Speaker 4 (14:57):
Yeah, performance, I think that absolutely should do.

Speaker 3 (15:00):
Of course, I think that, you know, always the story
with hypercars is can you develop then add a reasonable
costs because clearly you've always got to be trying to
stretch the boundaries of the possible and that always is
a challenge. And of course what's really hard right now
is that they just have this competitor who seems to
have cracked it right with Ferrari. I mean, say what
you like about the fad. Personally, I'm not a big fan.

(15:22):
I know a lot of people have mixed opinions about
that vehicle, but it's going to be an absolute cash
machine for Ferrari. You know, they're all sold out seven
hundred and ninety nine units, so that's a lot more
than they produced. It's a lot more than they produced
with le Ferrari. They managed to allocate them all very quickly.
I dare say they in a couple of years or
come out with the spider version as well, a few

(15:42):
hundred of those. So they're going to make you know,
billions of revenue with that and analysting very high margin.
And so if Porsche is not able to do that,
you know, if they came with a hyper car and
then it wasn't very profitable for example, that would be
you know, disastrous too, So so you know, really difficult one.
I just I get the feeling of the fact it
hasn't happened, you know, reflects either challenge is on the

(16:03):
engineering side or yeah, the power train in front is
a question. And then simply they've just got so much
on their plate at the moment. You know, the electric
strategy is not you know, gone up and smoke China's
strategy too, so you know, trying to get all those.

Speaker 4 (16:16):
Things in line.

Speaker 3 (16:17):
I think maybe it's like too much and the thing
that's like not happened yet.

Speaker 2 (16:20):
I want to just say that the F eighty being
sold out at those prices just proves the fact that
rich people have more money than sense. I mean, people
are just throwing money at it because it's ferrari, And
I think probably those buyers are not true car lovers,
because how can.

Speaker 1 (16:37):
You say that?

Speaker 2 (16:38):
How can.

Speaker 1 (16:42):
Seeing the same car that I'm seeing?

Speaker 2 (16:48):
I see the weak powertrain?

Speaker 1 (16:49):
What are you talking about?

Speaker 2 (16:51):
Is it the six even or is it only four cylinders?
Who knows? I didn't tell you what it is.

Speaker 1 (16:56):
Read nine hundred horse power? It does, I don't care,
But that doesn't get under the hood and count the cylinders.
I mean, I can't even none of us on this
call right now could drive that car to its full
capacity because we're not professional driver.

Speaker 2 (17:12):
So many cars and look, I've driven many many cars
that have huge horse power numbers, but they're hybrids and
they have a two liter four cylinder, and they're just
not pleasing vehicles to drive. The horse power doesn't matter anymore.
That's why something like a Rimeck hypercar makes me feel
a little bit sick. I mean, it's just a waste

(17:34):
of a soulless waste of money. And the only people
who want something like that are like Lewis Hamilton, because
he just has so much money and doesn't care that
much about it.

Speaker 1 (17:42):
I would withhold judgment until you've driven it, my friend,
I guarantee you fair, if you drove it, you would
be screaming with joy and pleasure.

Speaker 2 (17:53):
Well, I also paid for it, right, because I would
much rather have something that has true character, and I
sincerely doubt that that does. Although you're right, I haven't
driven it. I want to step back, though, for a
moment and walk through just the ownership structure of Bugatti
Remac because I don't think Chris, that a lot of
people understand it, and I think after reading your column

(18:15):
I do for the first time. So basically, Porsche owns
a forty five percent steak in the joint venture of
Bugatti Rimac, and Rimac owns the other fifty five percent,
but Porsche owns twenty percent of Remac, so in a sense,
they actually own more. And I wonder if this is

(18:38):
just a legacy of Wolfsburg, Like, are the Germans just
into these incredibly complex ownership structures or is there any
kind of reason for that?

Speaker 4 (18:48):
Well, I mean not. You know the history as well
as I do.

Speaker 3 (18:51):
You know this used to be owned by Volksbag and
it was Ferdinand Pich.

Speaker 4 (18:57):
His baby.

Speaker 2 (18:58):
You know, he is the one who.

Speaker 3 (19:00):
Rescued Bugatti, developed the you know, the ve run and
great expanse really you know, brought it up to the
modern era. And then of course we had diesel Gate,
we had you know how a dec CEO came in
with the or the electric strategy, and Bugatti didn't really
seem to fit in that structure anymore. And as you
know discussed, he didn't have the you know, the economies

(19:23):
of scale, the shared parts and all the rest of it.
And so they found this sort of neat solution. You know,
they saw Marty Rummack, and to be honest, I always think,
my goodness me. You know, he'd already had investment from
Porsche into his you know, component maker and all the
rest of it in the his Rimant group. But then
they suddenly came to him and said, hey, you know
you're gonna have Bugatti. The guy was thirty three years old.

(19:46):
I mean, it's incredible. And that's what they did because
at the time, you know, he developed the Nevera and
the expectation was that he would then develop basically an
electric Bugatti. I think that was the feeding back then,
and you know that the future for Bugaddy was going
to be electric too, and he would essentially make it
a kind of an electric version of the Shiron. Now
than goodness he didn't. But yeah, as a result you

(20:09):
have this structure with you know, the state got past
the Porsche portion went public and so then you had
forty five percent on the Porsche side fifty five on
the Remax side. With importantly Marti Rimak as the CEO,
so he's the one driving the force there. And to
be honest, I mean he's made some good decisions. As say,
he didn't develop an all electric Bugaddi, I think that

(20:32):
would have been a mistake in hindsight. So it's a hybrid,
the tur Beyon. It's a good decision. You know, developed
a relatively low cost. He's got Cosworth, you know, providing
the engine. I think you know he won't have any
problems on the Cylindercount with that engine.

Speaker 2 (20:45):
Matt.

Speaker 3 (20:45):
That's sixteen of them, I think, so you know takes
that box for you. And so yeah, in the theory's
going okay. But you know, actually, if you look at
the financials, which I did in the Porsche accounts, you
know that they lost money last year and the sales
tumbled almost fifty percent, and that's partly because of just
the motorcycle.

Speaker 4 (21:03):
This hiron ran out. That turbion has not arrived yet.

Speaker 3 (21:05):
They've got a couple of victuals, you know, convertible in
the track only car that will tide them over for
a bit. But nevertheless, there's probably some things that Porscha
and Bagaddi didn't you know, sorry, Porscha and Rimac didn't
entirely agree on, and the result is now you have
this sort of type of war between two of them.

Speaker 1 (21:21):
I would say to your point about Mate Rimac, he
is a really interesting individual and just listening to you
to describe this timeline, you know, there's there's somebody else
who's been in the car world, who's been very young,
who's been a disruptor with electric cars, and that person
was Elon Musk And and you know, I remember interviewing

(21:46):
Elon twelve years ago, before all of before he became
who he is now, and watching and speaking with Mate
over the past few years. It's almost like Mate is
the antithesis. He's the other side of the same coin
of Elon, where this is someone who's very young, incredibly

(22:07):
intelligent and a disruptor. Of course Mate is doing it
in a different way, but I do think it's really
interesting to watch him developed, And I don't I don't
really know what my point is with this, other than
to say I don't think this is the last act
of Mante by any means.

Speaker 2 (22:26):
Well, certainly not only is able to buy Bugatti. I mean, yeah,
I think one of the things that struck me most
about your story, Chris is that the price seems so low, right,
isn't it a billion euros or there is.

Speaker 3 (22:42):
What bloom News is reported, Yeah, as a total value
for Bugatti remark, that does seem low, But there are reasons, right,
I mean if you think about actually how much revenue
they make in a year. You know this is a
joint venture. They still one hundred cars a year, and
now okay, find those cars are four million, three four million,

(23:03):
but that's still you know, I need three four hundred
million euros of revenue plus as say, they don't actually
make money at the moment. Now that should change with
the tubion, but in that sense pure financial is not
going to be worth that much. However, of course, as
we know, hypercar companies are of course highly sought after.
His trophy assets, and you've seen a lot of them

(23:24):
change hands, notably McLaren recently, so I'm sure there are
a lot of people out there'd be very interested in
acquiring that stake. Is clearly Mutti roommack we need some
financial backerds if he wanted to to purchase that stake.

Speaker 2 (23:36):
That's what by the way, folks shagging paid for Jucati
as well, was a billion euros. And I think the
difference between to me what Porsche does and Bugatti does.
Porsche makes these near perfect, beautiful machines. Bugatti makes artwork
that you can drive at incredibly high speed. So I

(23:58):
feel like there's a vow to Bugatti beyond just the revenue.
And I don't think that three x revenue or even
two x in a year or two with prices going
in this direction, is that high a price to put
on it. But you're the expert, right because you're the
one looking at these car companies all day long, at

(24:19):
the financials, and then you know, typing along in our
Berlin office.

Speaker 3 (24:23):
This is not I'm sure that's not the end of
the story. And my argument today was, you know, Porsche
isn't under no pressure to accept that any offer presented
to them, they don't have to sell.

Speaker 4 (24:33):
In fact, they.

Speaker 3 (24:33):
Could have good reasons to retain it if they thought that,
you know, taking a control of Bugatti and therefore, you know,
bringing that into the Porsche fold, you know, talking about
it regularly was going to like, you know, improve their valuation.
You know, just even like a sprinkle of Baghatti on
that on their share price could do could be worth
you know, billions in market value, because you know, stop

(24:57):
market valuations for car companies that they're not entirely logical.
You know, Ferrari a company that is doing excellent job,
but it makes fourteen thousand cars a year and is
now you know, the most valuable European automaker, worth more
than Fox five, which is which makes nine million cars
a year and owns Lamborghini and Bentley. So you can't say, well,
it's just because you know, of luxury here whatever, you know,

(25:20):
some of this stuff is is just sort of almost
like magic, and so I would imagine that it might
have been people at Porsche who thought, you know, maybe
if we did more with Bugatti, we could have some
of that kind of Ferrari evaluation magic too.

Speaker 2 (25:31):
It's so un German, though, isn't it Hannah Bugatti? It's French.
They have a castle.

Speaker 4 (25:37):
They have a castle.

Speaker 2 (25:38):
It's like, you know, Porsche should have like a Bauhaus
cement box in which they build their machines. It just does.

Speaker 4 (25:45):
They do have a nice museum.

Speaker 2 (25:47):
Yeah, it's nice, but it's like modern architecture, all angles
and straight lines, and it just doesn't it doesn't seem
very Bugatti esque.

Speaker 1 (26:03):
Can we pivot a little bit, Chris and ask how
tariffs are going to affect all of what we've just discussed?
And maybe this isn't a pivot, it's more of a segue.
The addition of twenty five percent at this point, twenty
five percent onut a motive tariffs? Does that change the
proposition for what Porsia is trying to do and how
Portia is pivoting? And also within relief to Ferrari, which

(26:28):
we're calling a competitor, and I know you guys tend
to when you're analyzing these companies, but is it really
a competitor. Ferrari just seems to be quite in their own,
you know, the porch, right, And let's be honest, like
historically Portia is a very sort of humble, just sporty
track car. You know, they've never been Ferrari. So sometimes

(26:54):
when I read about Porsia being a competitor Forra, I'm
kind of like, well, no, they're not at all. But
that's not a value judgment. It's just like Ferrari is
in a whole other echelon and always has been.

Speaker 3 (27:08):
I agree with everything you've just said, but I think
the thing that's changes is Ferrari has managed to move
even into it even more of its own lead right
over the last past couple of years. When it became
public company, you know it probably about a decade ago now,
I don't think anybody would have dreamed of the kind
of stock market value and the kind of profitability that
they've really managed to generate now. And I think that's obviously, like,

(27:31):
you know, inspired everybody else in the industry who thinks,
well we can have a bit of that too. But
when then you look at the pricing power, I mean, really,
Ferrari is moving away now average price per vehicle of
more than four hundred thousand euros, so similar amount of dollars,
and Porsche down on kind of one hundred and fifteen
thousand euros. So again like similar amount of dollars. You know,

(27:52):
it's a huge gap. And so yeah, when Tara happened, Uh,
they're obviously much more of a problem for portion than
they are for Ferrari came out straight away, I think,
within hours and said, okay, this is what we're going
to do. Well, you know, we're going to honor our
contracts on your two nine six that you ordered, like
you know, two years have go. But the new models,

(28:12):
you know, you're twelve cylindery, you know, the price is
going to go up by ten percent.

Speaker 4 (28:17):
I think that's what they said.

Speaker 1 (28:17):
I mean, truly, will anybody even blink at that?

Speaker 4 (28:21):
I sit somewhere in the middle of this debate.

Speaker 3 (28:22):
I think that Ferrari is getting close to the point
where customers will care. And you know, clearly your your
Ferrari collector who has thirty forty cars, who buys the
fad not because they love the car, but because they
want the the SP four. When that comes, you know,
these people they'll just you know, they take the hit.

(28:44):
It's not about the money, and they'll be fine. But
they still have to sell a decent amount of range
cars every year. And if those vehicles really start to
depreciate and they are now like if you bought an
SSF ninety or a two nine six, you're sitting on
quite the loss and you feel like you've got to
do that again and again, and then they increase the
price of the next car.

Speaker 4 (29:06):
You know, then you are starting to hit the limit there.

Speaker 3 (29:09):
And so yeah, we're talking about very privileged people who yeah,
you know, anybody who can buy a Ferrari is already
doing fine in life. So, you know, small violence, but
at the same time it is a threat to the
business model and very interestingly as well. One thing that
Ferrari has been doing that again everybody else in the
industry is trying to do, is personalization.

Speaker 4 (29:28):
And I mentioned it again today.

Speaker 3 (29:30):
You know, you turbinion will cost you for a million dollars,
but you know, add on another million by the time
you've spect it, right, And what Ferrari has been saying
recently is actually these customized options that the twenty five
thousand dollars paint job. These are the things that when
you come to sell the vehicle that the secondhand customer
is not willing to pay for because why would I

(29:50):
pay that, you know, which is frankly an absurd price
to pay for a paint job for a secondhand car
that wasn't you know a color that I chose because
it matched my you know, yacht or whatever and.

Speaker 4 (30:01):
So, and this is contributing to the depreciation.

Speaker 3 (30:04):
Just to finish the thought that basically, yeah, if Ferrari
start to depreciate more because people are specting them a lot,
then that's a bit of a threat to the business model.

Speaker 2 (30:11):
To me, that's a sad fact of buying custom vehicles
or adding aftermarket accessories. The next buyer is not willing
to pay for those almost ever. I wonder about the
the other car makers and how they'll be hit with tariffs.
We've already heard from Folkswagen today that they're they've got
cars on boats that they're not going to ship right now,

(30:32):
they're holding them in port, and that they're going to
charge an import fee on those cars that do get
to the US and get the tariff. So do you
know anything more from other automakers? I mean, how is
this going to affect the global industry?

Speaker 4 (30:48):
Have you got them?

Speaker 3 (30:48):
Have you got six hours for me to answer that question?
I mean, yeah, it's it's an absolute nightmare, Like for everybody,
there's nobody who's not affected. You know that, Yeah, the
four f one, fifty or whatever, you know, produced in
America but full of you know, foreign parts, and so,
you know, is a headache. But of course, you know,
the German automakers, including Porsche, who bring cars over from Europe,

(31:12):
are really you know, going to struggle here. And you know,
the thing that I really bothers me is that, you know,
American cars in particular were already far too expensive. You know,
the average price where are you remind me forty five
fifty thousand dollars something like that.

Speaker 4 (31:29):
And now what's going to.

Speaker 3 (31:31):
Happen is that those affordable models, many of which were
being brought in from South Korea or from Mexico and
so forth, relatively smaller cars, very in margins, those are
the ones that are gonna, you know, suffer and ultimately
will probably be cut and some of them maybe will
be able to shift to the United States. But there's
a reason they weren't being produced in the United States

(31:52):
because it was too expensive. And so if you you know,
you stop being able to.

Speaker 4 (31:56):
Provide new vehicles to.

Speaker 3 (32:00):
Middle class, ordinary consumers, then you know, it's not a
good situation for the industry.

Speaker 4 (32:05):
I think it's really sad.

Speaker 1 (32:06):
Frankly, how soon do you expect that we are going
to see real effects of this? I mean, aside from
just when we go down to the dealership and try
to buy a new car, I'm talking effects in terms
of the mix on the road of American cars versus
foreign made cars. I mean, are we going to see

(32:27):
a change a year from now?

Speaker 3 (32:29):
I mean, I do think it'll take some time to
feed through. I mean, the tariffs came into force today,
but we've still got, you know, to wait a bit
for the can sorry for the part situation. Just in
the last few minutes, actually, we've had Canada come out
and say that we're going to do, you know, basically
the same to the United States that the US has
done to us, and we'll have to wait and see

(32:51):
what other kind of retaliation we'll have as a result
of this as well. So I don't think we've heard
the last of it. Yeah, but I mean this, yeah,
to be blunt, is going to be severe, and it's
going to be really really tough on this industry where
you know, if the hope is that carmakers are going
to reach are production, then you want these carmakers to

(33:12):
be profitable, and instead they're going to take massive hits
to their earnings, which is earnings that they can't invest.
And I recognize that, you know, the United States was
importing a lot of cars.

Speaker 4 (33:24):
Uh you know, roughly half.

Speaker 3 (33:26):
Of the US production was being imported. But at the
same time, it was you know, considered to be a
good thing that Mexico, Canada and the United States had
created this kind of automotive plane where people could could
could trade and supply chains were set up accordingly. And
to just overnight say we're not doing that anymore is

(33:48):
to you know, cause huge problems for the industry.

Speaker 2 (33:52):
I would guess, by the way, Hannah, that the mixed
shifts in terms of used cars and new cars because
to Chris's point, you know, the affordable cars that were
dragging the average price down to forty five or fifty
thousand dollars, they won't be sold here anymore, or they won't.

Speaker 1 (34:09):
Potentially, I mean, they won't be that cheap. Said that.
Did you see that piece?

Speaker 2 (34:13):
Yes? But I think the American cars that you would
think more people would have to buy are just so
exorbitantly expensive. I was looking yesterday at a Chevy suburban
and if you want the six point two liters of
V eight, it starts at eighty six thousand dollars.

Speaker 4 (34:30):
It's a lot of Wow.

Speaker 2 (34:31):
That's like supposed to be a middle class family vehicle, right,
but it's twice as much as like the average income
and you know in flyover country. So I just can't
believe people are going to be able to buy new
cars anymore, and you won't be able to find the

(34:52):
little inexpensive ones from Korea.

Speaker 3 (34:54):
We've had this record before too. I mean, this is
essentially what happened in the pandemic, right The price of
new vehicles went up, the the supply went down, and
the users market exploded in prices rose. And I'm sure
we're going to see a similar thing again where people,
as you say, forced out of the new market have
to buy used and that's going to, you know, put
pressure on prices again. It's going to create inflation, and

(35:15):
I'm not sure that's what we.

Speaker 1 (35:16):
Want, Chris. Is there any sense that there will be
like a flip flop, for lack of a better word,
that a year from now, President Trump and this administration
are going to say, actually never mind, you know, we're
going back to what it was before.

Speaker 2 (35:35):
Wait, you doubt the stability of President Trump's policies.

Speaker 1 (35:38):
I mean, just a question next year or next week,
you know, is there any likelihood of that?

Speaker 3 (35:44):
I wish I had a crystal ball, but I would
say this, I think Trump has been relatively consistent, not
just about tariffs, but particularly about the order industry. He's
always had a bone to pick with, you know, car imports,
specifically ones for example. This has been a constant, you know.
And the fact that you know, it didn't we didn't

(36:05):
have more you know, radical tariffs in the first time,
I don't think it should blind us to the fact
that this has been something that he's been wanting to
do for a while, I think, And so now I
don't really expect you know, a massive climb down from this,
you know, as we've seen today. I mean, you've had
a terrible reaction in the market to you know, Liberation Day, tariffs,

(36:29):
stocks melting down, the dollar, you know, selling off.

Speaker 4 (36:32):
And you know, I used to think.

Speaker 3 (36:34):
Of Trump as the kind of you know, the president
of of sort of business in the stock market who
judged himself by the fact that you know, stocks went up, right,
and now doesn't seem to care about any of that anymore.
And you know his hope, of course, I should mention
this to be fair is to you know, return manufacturing

(36:55):
to the United States and create jobs and all the
rest of it. But you know, these people who you
know working manufacturing plants also need to be able to
afford cars.

Speaker 2 (37:04):
I just kept thinking. I mean, on the one hand,
I guess union wages are around eighty dollars an hour,
which is which is good, But you're still not going
to be able to buy a suburban. Uh, it's just
going to be out of their out of their reach.
So let's bookend this discussion with Aston Martin. I think

(37:26):
it's great to start with a Portia and Bugatti, stop
in the middle to talk about middle class cars and tariffs.

Speaker 4 (37:34):
And then affordable car. Now back to election.

Speaker 2 (37:37):
So I just you know, I have heard Laurence Stroll's
pitch for why Aston Martin should be worth more, and
I leave there saying like, yeah, man, he's totally right. Uh,
it should be worth at least, you know, like half
of a Ferrari valuation. But I think you pointed out
in uh when you wrote a column about this a

(37:58):
couple of days ago, that it's only like one percent
of Ferrari's valuation. And what is the problem with Aston
Martin Because even if you find flaws here and there
with their vehicles, they're still like iconic cars that I
think most people would love to drive or even own.

Speaker 3 (38:19):
I think if you hit the nail on the head,
I mean, I think there is a lot of passion
for this brand. I think they do produce very highly
desirable vehicles, and yet somehow they always contrived to kind
of get it wrong. And part of that was the thing.
You know, the original IPO was a little oversold, a
lot of hype. You know, they went public at a
kind of four billion valuation, and then they learned that,

(38:42):
you know, supply and demand. They've always had a bit
of a job to get that right. They wanted to
grow stroll for example, how this target you wanted to
get to ten thousand units a year. I think they
sold six thousand last year. And you've had these periods
throughout the asked in history where you get the kind
of build up of stock on deed of four courts,

(39:02):
and you know that then causes all kinds of problems,
you know, to reduce prices or it hits the residual
values and so forth, and then you have to like
sort it out again. So the currently they're in the
process of trying to balance supply and demand again, which
means reducing wholesales and all the rest of it. And
you know it contributes to this kind of stop start
profit warning here there capital rais you know again and

(39:23):
again and you know, stroll again. You know, he's a
billionaire many times over from his days in the fashion world.
But I don't think he probably expected to have to
put as much money as he's had to put into
Aston Martin as he's done. I think now his consortium
is you know, it's about six hundred of million of
change they put in. Now hopefully that will be the

(39:46):
end of it, with the fifty million he put in
this week. But again back to your evaluation point. You know,
he owns a Formula one team as well, which carries
the same name, and I mean, look at what's happened
to F one team valuations.

Speaker 4 (39:58):
Now, I think his Aston Martin.

Speaker 3 (39:59):
Team, which is you know, by no means the most expensive,
has a one point eight billion pound enterprise value or something,
which you know, we're talking three times what this car
company that sells you know, thousands of vehicles a year
in employees, I don't know how many people. You know,
there's a huge golf there now and clearly, you know
that's partly because the economics of F one have changed.

(40:21):
I mean F one teams now make money they didn't
before that, the huge trophy assets, you know, the story
f You know, US fans are bracing all the rest
of it, whereas the car industry remains capital intensive, you know,
periods of pricing difficulties, supply demand and all the rest
of it. And yeah, Aston's had some problems too that
you know, they haven't always got everything right technically. Coming

(40:43):
back to our HyperCard discussion, I mean, they produced the
Valkyrie goodness me. I mean I think one person involved
in that project that it almost bankrupted the company.

Speaker 2 (40:52):
You know what beauty though that yeah, I mean wow, Yeah.

Speaker 3 (40:58):
If you do things like that, and they really really
pushed the push the boat on that one, then you
know you have problems. And clearly that you know, they
had all kinds of engineering difficulties with that, I think.
But now the next one is the Valhalla, which is
kind of like I think they refer to it as
sort of like a hypercar at supercar price and delivery.

Speaker 2 (41:21):
They call it not nearly as nice.

Speaker 3 (41:23):
There you go, let's just hope that they have an
easier job producing that vehicle, because that will be a
real test for the company. Now and they've got this
sort of very sensible sounding, very reliable CEO now who
did a great job at Bentley. Bentley was another one
like never used to make money at Folk Sparden and

(41:44):
now is making twenty profit margins, which is you know, great,
and they hope he'll be able to repeat the magic
at Aston.

Speaker 4 (41:52):
But I don't know.

Speaker 3 (41:54):
People have been burned so many times by this company,
you know, not just recently and it's you know, stop
market history, but before that's I think seven times bankrupt
or whatever.

Speaker 1 (42:04):
While we're on the topic of Adrian, you know, he's
coming from this very disciplined German ownership company and of
course very conservative Bentley and everything. You know, a very
nice guy. Everything I hear about him, and he is
he's great in a crisis. Does that model will that
work at Aston Martin? I mean, it's a completely different culture,

(42:29):
and you know, from what I hear, they really desperately
do need discipline. So now they've got their discipline Daddy
and Adrian Hallmark. Is that gonna work well?

Speaker 3 (42:40):
I think it will as long as they let him
get on with the job. I mean my impression, I
mean it is a bit unfair, was that, you know,
Lawrence Strall, he's executive chairman and maybe like to kind
of get involved quite a lot, and they really just
need to let Adrian do his thing. I think they
will now, And I think we had a we had
a good Bloomberg News feature on the company a couple

(43:03):
of months ago where they said exactly that that they
they were going to give the freedom to kind of,
you know, execute his plan. Now it's is all very straightforward,
sensible stuff, you know, not like spending a fortune developing
new vehicles all the time, but you know, trying to
produce derivatives, trying to push the personalization thing.

Speaker 4 (43:25):
That they're already doing pretty well on.

Speaker 3 (43:27):
By the way, they're at like I think eighteen percent
of revenue from personalization. Now that's kind of Ferrari levels.
They're probably not getting the same kind of pricing, but
do you know what I mean that they're they're well
advanced down that path, and so they can do that
and get these programs delivered on time, not have dealers
clogged with inventory again. They've got a brand new lineup

(43:50):
of vehicles now, all of them have been refreshed, including
the DBX, which is their SUV which I've I'm not
a huge fan of, but they've done a good job
now out with the refresh I think the interior looks better.

Speaker 1 (44:05):
Good.

Speaker 2 (44:05):
But don't you like about that? We love it.

Speaker 4 (44:08):
You love the DVXSSIV.

Speaker 2 (44:12):
I mean, I think it's really fun to drive. It's uh,
sounds great, feels great. As you say, the interior has
been updated and is pretty fantastic, I guess.

Speaker 3 (44:24):
And look, but they're currently only selling I think three
or four thousand of a year. I mean, I think
the Benti Yaga, which is also a matter of taste,
but you know that sells a lot more, and that's
key to the economics of these companies. You know, that's
been obviously very very important for all of these companies
that they have SUVs that sell. And I think Aston

(44:45):
needs to do more with it's on, hopefully by you know,
better marketing and so forth, that they can they can
boost the volumes of that because that was obviously be
very instrumental in driving a return to profits, which is
what we need to see. I mean, this is a
company that just has lost money, but for years, years
and years he is and they're promising this year and

(45:06):
this year finally we're going to be profitable and we're
going to generate cash. If they can do that for
a few quarters, you know, things could change.

Speaker 1 (45:15):
It's kind of it is kind of like you're in
this dysfunctional relationship where it's just like, just lie to
me one more time, and I'll still believe you because
you're beautiful, because the cars are beautiful, and we all
want it to succeed, and it's such a known thing
and we love James Bond and all of these things,
and we just take it because we want to believe.

Speaker 2 (45:36):
I've dated Aston Martin before and I wanted to break
up for like years. It took me years to finally
get the courage to leave her. But yeah, I think,
first of all, I want to say that the Benega
like objectively, is fugly right, and the.

Speaker 1 (45:49):
Aid Martin looks far better than Yes, yeah, bar none,
I mean no comparison three on that.

Speaker 2 (45:56):
Yes, we all agree. I think I also wanted to
point out just as an aside, there are a couple
interesting connections between the Bugatti terbillone and the Aston Martin Valkyrie. Right,
Cosworth makes or at least worked on both of the
internal combustion engines, and Rimac clearly did both of the

(46:18):
electric drive trains. So that's pretty cool that we can
get from one to the other.

Speaker 1 (46:24):
Well, this ties into another sort of bookend question that
I wanted to ask Chris, was when we're talking about these,
you know, hypercars that are the halo cars for the brand,
whether it's the Turbion or the Valkyrie in Valhalla or
whatever hypercar Portia is or is not making. Obviously the
fans want those, But to your point Chris and your

(46:48):
column about Bugatti, those are lost leaders often. So what
is the rationale at these companies, whether it's Aston Martin
or Porsche, to make a halo hypercar that they might
lose money on but then maybe it generates value and
hype for the brand in other ways. Can you walk

(47:09):
us through that, because at this point it's like, well,
if you're losing money, why make them?

Speaker 3 (47:13):
Well I think that's right, Hannah, and I think the
point is that, like it isn't always the lost leader
you can make good money. And I was looking, for example,
look at can exec right, They've managed to really you know,
turn around the good business now and I think they
probably have hopes for producing higher volumes that they're even
making I believe for for Seedar.

Speaker 1 (47:35):
Hyper carnal camera.

Speaker 3 (47:37):
Yes, you know it's not you know, obviously not making billions,
but like you know, I think they are profitable and
you know, they've done that on the huge constraints, capital
constraints in the fact that these vehicles, you know, they
have to build them and get them homologated, which means
you know, they've got to pass all the rules and
regulations surrounding emissions and safety and all the rest of it.

(47:59):
Really hard nuts crack. But you know, the promises is
the Ferrari thing, right, if you can industrialize that process
and you can get people queuing up to buy these cars.
And now Ferrari have got this e factory where they're
able to turn out you know, a huge amount of
space and develop them and not just of course the
hyper cars. So you know, if you really get the

(48:19):
business model chraining, then you have a vehicle like the
the SP three, which is not the height of technology.
It's not about being like the absolute, you know, best
of the best, high performance, so you can make huge
margins on a car like that. Because actually, if I'm honest,
if you gave me the choice tomorrow, and I hope

(48:40):
somebody will between an f AD and SP three, I
would take the SP three and that would have been
really good back because of course those cars now I
believe they were like a couple of million new and
now they're trading up. I was told the other day
by a dealer like two or three million over.

Speaker 1 (48:58):
This is the dog that everyone it's chasing.

Speaker 4 (49:00):
No, that's what they want.

Speaker 3 (49:02):
And so people are buying the FAD just to get
the SP four or because they just have to have
the FAD in their collection. So if you could develop
a business model, well people buying cars not because they
love them, because they just feel they have to have them.

Speaker 4 (49:14):
And that's an excellent business mode.

Speaker 3 (49:16):
Now, not everybody can achieve that, but I'm sure that's
that that's the hope of many of these.

Speaker 2 (49:20):
Come course, I guess that that's the reason why you
shell out for the F eighty. You're like, yeah, I'll
take the V six, you know, because I want to
get awesome. Dude, I'm so glad that you write for us,
and it was great to be able to work next
to you for a few a few quick years, a

(49:40):
few brief years in the Berlin office. But we'll have
to have you on.

Speaker 4 (49:44):
Again, please do. I love it. Thank you.

Speaker 2 (49:52):
That was Chris Bryant, my old buddy from Berlin.

Speaker 1 (49:55):
So cool, too, enlightning.

Speaker 2 (49:57):
Yeah, to hear from him, and he so thought full
on these things. And I know because I lived well,
I didn't live in the office, but I spent a
lot of time in the office, and he was one
of the other people that was reliably always in the
office on freezer plots. I can't believe you've never been
to Berlin, by the way.

Speaker 1 (50:15):
I know, I know, I know. I find it shocking myself.
I've been. I feel like I've been to every other
town in Germany, but I have not been to Berlin.
And I think that I like it the best.

Speaker 2 (50:24):
Yeah, it's definitely up your alley. I know, like you
would really appreciate the people and the culture. It's very
different from the rest of Germany.

Speaker 1 (50:33):
I don't want to I don't want to rain on Stuttgart,
but I have to imagine that Berlin is a little
more interesting.

Speaker 2 (50:39):
The mustaches in Berlin are ironic as opposed to those
in Stuttgart. They're meant very sincerely.

Speaker 1 (50:46):
Ironic and iconic. I love it. Have I ever told
you my family's from Fulda? The German side of my
family tell me that, Oh, yes, the Mullenhauer side, the
German side. The Mullenhauers are from Fulda. So I've been.
I mean, I truly have been in a lot of
places in Germany, Hamburg, Frankfurt, you know, Munich, Dusel, Dwarf,

(51:09):
all all of them. But no Berlin.

Speaker 2 (51:12):
So none of my family is German, but I would
be there. My brother, my dad all went to boarding
school on Switzerland, so we all speak German. And I
have a somewhat of a preference for German cars. I
just feel I feel like they're so solidly engineered and built.

(51:34):
Stuff doesn't just fall off of a German car like
it will with an Italian car or No.

Speaker 1 (51:41):
I just had a really sad thought, what does does
this mean we're not going to get German cars anymore?

Speaker 2 (51:47):
I hope that's not the case. I hope that's not
the case. Love, I do love the US product, so I.

Speaker 1 (51:55):
Don't it's not competitive. Oh come on, man, it's not competitive.

Speaker 2 (52:00):
You've got to drive the Escalade IQ.

Speaker 1 (52:02):
Right, I did. And it's funny you mentioned that piece
will be in the magazine next week.

Speaker 2 (52:07):
All right, So are you still not allowed to tell
us you're driving Impressions or Oh.

Speaker 1 (52:12):
Well, I certainly can. Maybe we talk about it though
when it publishes. But in general, I would say best
of the bunch. I mean best of the bunch.

Speaker 2 (52:22):
I mean, I love obviously, I have a soft spot
in my heart for the F one fifty and so
many different variants, and I love the GM trucks and
especially the SUVs, you know, the Tahoe and the Yukon.

Speaker 1 (52:35):
Just gonna have to drive corvettes, I guess.

Speaker 2 (52:37):
And corvettes obviously. It's a supercar, so I love that
one too.

Speaker 1 (52:43):
I'm not going to take that, babe.

Speaker 2 (52:44):
By the way, I have coming to me today. I
am testing out an American and they say it's the
only American made motorcycle. It's it's a brand that you
cannot yet by this motorcycle from which you cannot yet
buy this motorcycle. But Buel is going to drop off

(53:06):
their new Supercruiser or the prototype of their Supercruiser. You know.
Buell Motorcycles, I know of them.

Speaker 1 (53:13):
I don't think used to be.

Speaker 2 (53:15):
Used to be owned by Harley Davidson. They made really cool,
kind of eclectic bikes. Eric Buell was I mean, his
thought was lower the center of gravity as much as possible,
So he was like he was one of the first
or at least of recent bike makers to put the
exhaust under the motorcycle, you know, and then everybody Ducatti

(53:36):
started doing with the Panagalis. But Harley, I you know,
I guess that business somehow failed at Harley Davidson, and
I think it went bankrupt. So for seven years they
couldn't really do anything.

Speaker 1 (53:49):
Did you say that they are They claim that they're
the first American.

Speaker 2 (53:53):
The only American motorcycles. So what they say about Harley Davidson,
That's exactly what I said.

Speaker 1 (53:58):
I was Harley May.

Speaker 2 (54:00):
I ran into I ran into the CEO and owner
at uh In Austin, at the Moto GP and one
of his one of his people, was saying that one
of his engineers he was working at the buel stand
and I said, what about Harley? And she said something
to the extent of less than half of the components,

(54:22):
you know, Harley Davidson are actually made in America.

Speaker 1 (54:25):
That's royally splitting hairs.

Speaker 2 (54:26):
What about Arch I don't even know if it's true.

Speaker 1 (54:29):
What about Zero? I could list you other brands.

Speaker 2 (54:32):
I hadn't thought about Zero, because I don't think there's
a motor. Is it that's an electric You're not.

Speaker 1 (54:38):
Gonna call a zero motor motorcycle? Honest on a contingency.

Speaker 2 (54:46):
Maybe, but I would guess they also have componentry that's
not all made well.

Speaker 1 (54:50):
Everybody has componentry that's not well.

Speaker 2 (54:53):
This is the idea of Buell. The idea is that
greater than half, like the Lion share. I think they
say seventy percent of their components are made right here
in the US of A. And this is something that
we are paying a lot more attention to right apparently.
Tesla apparently sixty to eighty percent. I've heard different estimates.

(55:15):
Sixty to eighty percent of their components are made in
the US, and obviously the cars for sale here are
also assembled here. That's far more than any other car maker.
I think with Ford and GM it's something like fifty
three percent, but it's more than that with Honda, Honda
sixty four percent.

Speaker 1 (55:31):
Yeah. And also let's not forget that Mercedes. Companies like
Mercedes and BMW literally are making cars in America, right,
So yes, they're.

Speaker 2 (55:39):
Not with foreign parts, right, just order all the parts.
And by the way, I was having a discussion with
with a European motorcycle maker this weekend. They're worried about
the tariffs and they are actually evaluating the idea of
just sending the motorcycle here in parts and assembling it. Yeah,
at a US address.

Speaker 1 (55:59):
Of course, because there's it's all shades of gray. There
is not a single car that only uses and is
only uses American made parts and is assembled in America
and sold in I don't think there's a single one, Karma.

Speaker 2 (56:15):
But Tesla is near as damn it to that. I mean,
they are pretty close to being fully made in America.

Speaker 1 (56:21):
I mean, but Tesla would be on its way out.
This is the worst of times for Tesla.

Speaker 2 (56:29):
Really seeing more and more bumper stickers that say I
bought my Tesla before Elon went crazy, yeah, or something
to that effect.

Speaker 1 (56:35):
I know, and I mean this this is not meant
to be a political statement, but I've never cared where
stuff is made. I don't understand why we can't have
Italian marble, French wine, Swiss chocolate, Italian leather, British tweed.

(56:58):
American luxury is not enough for me. I need the
world's fair, you know. I would like Japanese sake and
Scottish whiskey.

Speaker 2 (57:10):
Yeah.

Speaker 1 (57:10):
This, these are the best of the best. I want
the best of the world. Why don't you want that too?

Speaker 2 (57:18):
No, I totally do. But I think there's a there
are a few different issues. One is, you know, obviously
the populist drive is to give jobs that people that
live to people that live here, right, And then I
do care a lot of times where my clothing is
made really tools Japan. But that's yeah, because I want

(57:39):
high quality stuff, I know, right, you know, if I
buy something that's you know, woven, cut and sewn in America,
it's just or in Japan. Obviously it's just likely to
be higher quality. Well, you're some eleven year old puts
it together in Sri Lanka, right, But.

Speaker 1 (57:55):
The fact that you're buying Japanese denim implies that you're
not satisfied with a denim and you're not wearing Levi's.

Speaker 2 (58:02):
I'm mostly not, but that's because you know, the old
looms that were made back when American teens were high quality,
we were sold to the Japanese at World War Two.

Speaker 1 (58:11):
I know, you know what's really wild. I was just
at Levi's, like special itelier, and they were saying how
difficult it is to source vintage Levi's because they for
you know, their VIPs and stuff. Yeah, like it's extremely hard.
And they were saying exactly what you said, which is,
we were so stupid to give away all of those

(58:34):
looms to Japan because now Japan just runs the market
and they're so smart, and you know, kudos to them
for that.

Speaker 2 (58:42):
True. And now I have to use chat shept to
translate all of my uh, all of my letters into Japanese,
and then I send them to the Flathead and I say,
please send me these T shirts.

Speaker 1 (58:54):
And I just don't want to. I don't want to.
I don't want to lose all of these beautiful luck
uxtory things that we've become accustomed to. We've become accustomed
to a certain level of lifestyle, and of course, but
I'm a first world girl.

Speaker 2 (59:11):
I don't want to lose. To Chris's point, also, the affordability, right,
I mean, I want people in this country to be
able to get good paying jobs without being you know,
incredibly gifted, talented, extraordinary people. Right, just go to a job,
make enough money to raise a family. On the other hand,
if those products aren't going to be affordable to any

(59:32):
of those people, what's the point. I guess I was
thinking yesterday, maybe not everybody gets to drive a car?
Is that the idea? Like, not everybody needs to have
access to this.

Speaker 1 (59:45):
I would love it if all ride bicycles everywhere. Honestly,
I think that would be first of all, for sure
be a better world if everyone rode motorcycles or bicycles,
no question about that.

Speaker 2 (59:55):
Yeah, right, for sure. Yeah.

Speaker 1 (59:57):
And second of all, even in other countries, the people
who are assembling Ferraris and Rolls Royces are not purchasing
Ferraris and Rolls Royce. Good, there's more thing unusual about that.

Speaker 2 (01:00:08):
That's a good point. But if you're you.

Speaker 1 (01:00:09):
Are sewing in Dor's workshops, are not wearing Dor couture.

Speaker 2 (01:00:13):
If you're assembling, you know, a pickup truck at the rouge,
you should be able to afford to buy that pickup truck.
That was the idea with Henry Ford. Right, I'm gonna
pay them five dollars a day so that they can
buy the Model Ta or whatever it was.

Speaker 1 (01:00:28):
I'm more capitalists than that.

Speaker 2 (01:00:30):
I learn more and more things about you every every day, Hannah,
you got anything cool coming up?

Speaker 1 (01:00:39):
I'm driving a Volvo this week. Last week I had
Have you had cheese car? Yeah? Have you had the
a MG cle E Mercedes? Speaking of German cars?

Speaker 2 (01:00:51):
I it's have I have not? But I am a
huge fan of the cle Yeah, sleeper hit.

Speaker 1 (01:00:59):
It's a complete completely I was like, what loved it,
really loved it?

Speaker 2 (01:01:05):
Which one is it the fifty three or the sixty three?

Speaker 1 (01:01:08):
Fifty three? I'm looking at the Maroni right now. Actually
it's the fifty three. The AMG starting price seventy two eight,
which is cheaper than the Escalade or the whatever sub
you mentioned. Yeah, it's an inline six four and forty
three horse power and that's all you need. That's really

(01:01:28):
that's really all you need.

Speaker 2 (01:01:30):
But wait, we're talking about a coup, right, why would
you compare it to the Escalade?

Speaker 1 (01:01:34):
Well, because you just mentioned earlier that not an Escalade,
but whatever, the Silverado or some suburban you are I
can't remember all the suburban. Yeah, and you mentioned it
was like eighty six thousand, And I'm saying this with
the options, this incredible luxury product, AMG. No less starts
at seventy two. I actually think that's a rather good deal.

Speaker 2 (01:01:56):
No, it's I mean they are I love They're so
high there, so luxurious.

Speaker 1 (01:02:02):
It looked good too, It looks super good.

Speaker 2 (01:02:05):
To be fair, you can get a suburban with a
five point three leader, the tried and true V eight
for much less. But I'm just saying six point two
a pay up.

Speaker 1 (01:02:14):
Yeah. Oh. Also, I did have the urus Se, which
I think we've already talked about. I had that to
the Lamborghini Uru, the one you did, the one you did,
which only we don't need to get into it other
than to say it only confirmed my thought that it's
the best suv on the market right now period. I'm

(01:02:34):
not saying it's my favorite, but I'm saying it's the best.

Speaker 2 (01:02:37):
Do you feel like when you close the doors there's
not that solidity that you want from an SUV? I
feel that well, they made of carbon fiber.

Speaker 1 (01:02:44):
If you want solidity, you're gonna have to go with
the g. Let's be honest, I mean, speaking of favorites, agreed,
What are you doing this weekend?

Speaker 2 (01:02:53):
All right? Uh, let's see this weekend, I'm just gonna
be driving this Buele. I'm riding this duel. I'm going
to I had this buel American made motorcycle like an
hour north of here to Danbury, Connecticut, where I will
test drive a road King And we have yet to

(01:03:14):
determine how American that is. But I'm going to test
drive a road King to see if I prefer it
to the Fat Bob.

Speaker 1 (01:03:19):
And is this this is one that's for sale specifically, yes,
that you might be coming home with.

Speaker 2 (01:03:25):
Yeah, well, I mean I'm pretty sure I want the
Fat Bob. I rented it with riders Share in Austin
over the weekend and I had a great experience with that,
the Turow of motorcycles. Yeah. Yeah, so I'm just I
have a two wheel weekend ahead of me.

Speaker 1 (01:03:41):
Wow, you're really I feel like you're riding more bikes
than ever these days.

Speaker 2 (01:03:44):
It's well not since I mean before I had kids,
you know, it was every day, but I get it.
But now whenever I can awesome. Well that's all for
this week, I guess We'll see each other back here,
same time, same place next week.

Speaker 1 (01:03:58):
I'm Matt Miller and I'm Hannah Elliott, and this is Bloomberg.
M