Tariffs hit Inchcape’s Asia-Pacific sales, shares drop 10%

British car distributor Inchcape reported weaker first-half results on Tuesday (Jul 29) as US tariffs dampened demand for high-end vehicles in the Asia-Pacific region, hitting sales and sending its shares down almost 10 per cent.

The company, which exports cars for global manufacturers across 40 countries, reported a 15 per cent drop in organic revenue at constant currency from the Asia-Pacific region, which accounts for 28 per cent of its total revenue.

CEO Duncan Tait told Reuters that Indonesia, the Philippines and Hong Kong were among the weakest markets during the period.

Volumes in the premium segment slumped 40 per cent year over year in Indonesia and 15 per cent in the Philippines, Tait said.

Inchcape has distribution agreements with manufacturers including Mercedes-Benz and Harley-Davidson in the two South-east Asian nations.

Inchcape’s adjusted operating profit was £247 million (S$424.2 million) for the six months to June 30, down 12 per cent at constant currency from a year ago.

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Analysts at JP Morgan called it a “softer print” compared with expectations as earnings fell 11 per cent short of their estimates, and warned of further downward pressure.

Inchcape’s shares, which had rallied nearly 20 per cent in the past six weeks, traded down 7.6 per cent at 739.5 pence by 0800 GMT.

No direct tariff hit

Inchcape said it had not seen any direct material impact from US President Donald Trump’s tariffs, and that some indirect disruption to supply-related logistics was insignificant.

It retained its annual forecast of higher earnings per share growth.

Tait said trade deals struck by Japan and the European Union with the US would bring certainty to the industry.

He said supply in the first half held steady despite concerns about exports and production cuts due to tariffs, but indicated that the supply outlook for the second half remained unclear.

Still, the company said it expects financial growth in the second half thanks to upcoming product launches across brands for which there is robust demand and orders. REUTERS