Recasts after interview with executive chairman

March 18 (Reuters) - Potential U.S. tariffs on products from Mexico and Europe could curb sales volumes at Brembo BRBI.MI, its chairman said on Tuesday, as the Italian brake maker forecast a revenue drop of about 5% this year.

U.S. President Donald Trump agreed at the beginning of March a one month exemption to certain automotive products from his 25% tariffs on Canada and Mexico, which were due to be introduced at that time.

Brembo's Executive Chairman Matteo Tiraboschi said the company serves its U.S. market from around 70% local production, and 30% from Mexico.

However, Brembo's Mexican production is largely aimed at automakers that build vehicles in the country for export to the U.S., he added.

"If we have 25% tariffs, our prices will automatically increase by 25%, so the increase will directly hit U.S. clients," he told Reuters after the company reported a 1% drop in 2024 core income to 661 million euros ($724 million).

Asked whether tariffs and following price increases might affect volumes, Triboschi said they "certainly could".

"What worries us most are potential tariffs on our clients which produce in Europe and send cars to the U.S., which is what happens in the high-end segment of the market where we operate".

Brembo's clients include premium carmakers such as Porsche PSHG_p.DE, Audi, BMW BMWG.DE and Lamborghini.

Trump has threatened tariffs on European-made cars but has not announced any so far.

Milan-listed shares in Brembo closed down 15.2% on Tuesday, as the company warned market uncertainty was weighing on its 2025 outlook.

It said its full-year revenue forecast could improve if the geopolitical situation and trade tensions stabilise in the second half of the year, and be helped by the full consolidation of suspension technology manufacturer Ohlins, which it bought last year for $405 million.

This could lead to 2025 revenue in line with last year.

The Ohlins' deal, the largest acquisition in Brembo's history, was completed at the start of this year.

In 2024, Brembo's revenue was broadly unchanged at 3.85 billion euros. The company proposed a 0.30 euros per share dividend, in line with its payout last year.

($1 = 0.9133 euros)

(Reporting by Giulio Piovaccari in Milan and Romolo Tosiani in Gdansk; Editing by Milla Nissi and Mark Potter)

((giulio.piovaccari@thomsonreuters.com))