London, Oct 2025 — Ferrari has begun sharply reducing the number of cars allocated to the UK, responding to weakening residual values and shifting buyer demographics following the government’s decision to abolish the non-domicile tax regime.
Chief Executive Benedetto Vigna confirmed to the Financial Times that the company started cutting UK allocations around six months ago, describing it as a “structural adjustment” aimed at protecting the resale value of its cars — a key pillar of Ferrari’s premium brand and financing model.
“Some people are getting out of that country for tax reasons,” Vigna said, adding that the move reflects wider market trends rather than a temporary reaction.
Wealth Exodus and Market Strain
The tax reform, which took effect in April 2025, ended preferential treatment for wealthy residents who previously paid lower taxes on foreign income. The shift has reportedly prompted several high-net-worth individuals to leave the UK, eroding Ferrari’s traditional customer base.
Residual values — the measure of how well cars hold their worth — have already taken a hit. According to Auto Trader data, between January and October 2025, Ferrari’s Purosangue SUV saw its resale value drop by 12.2%, while the SF90 Stradale declined 6.6%.
Because many luxury cars are purchased through lease or finance deals, falling residuals make ownership more expensive, pushing up monthly payments and dampening demand. The UK’s right-hand-drive market further limits resale options abroad, amplifying depreciation risk.
Protecting Exclusivity and Margins
Ferrari’s business model hinges on strict production discipline and scarcity, allowing it to maintain high margins and strong second-hand prices. The company says that philosophy remains intact despite the UK slowdown.
Still, headwinds are building. Ferrari’s shares have slipped nearly 17% this year amid investor concerns about flat margins and the financial strain of transitioning to hybrid and electric vehicles. Analysts are now questioning whether the automaker can sustain its reputation for value retention in a changing global market.
Luxury Market Ripple Effects
Ferrari’s cutbacks could signal a broader retreat among supercar makers wary of UK-specific risks — from tightening tax policies to capital flight among the wealthy. For dealers and collectors, supply shortages could raise the scarcity premium in the short term but increase volatility in the used market.
Dealers are likely to proceed cautiously with inventory, while financing terms for buyers may tighten further as residual values slip.
The broader implication, analysts warn, is clear: policy shifts targeting the wealthy have immediate consequences for the luxury sector. As the UK government signals more aggressive tax measures in upcoming budgets, global brands catering to high-net-worth clients may need to rethink their strategies — and their presence — in Britain.
