Berlin — BMW maintained its full-year guidance on Thursday despite quarterly earnings dropping by a third and the spectre of US tariffs, arguing that its large manufacturing presence in the US gives it an edge over rivals.
By contrast, Volkswagen, its luxury brand Porsche and Mercedes-Benz have all cut their outlooks.
European vehicle manufacturers are still digesting a new 15% tariff agreed between the EU and US President Donald Trump; it’s lower than the current rate of 27.5% for autos, but still poses a major obstacle to their export-focused businesses.
BMW, whose biggest plant is in the US and is Germany’s top vehicle exporter by value, said it continues to expect 2025 earnings before tax to be on par with the previous year when it logged just under €11bn.
That’s despite issuing its initial forecast in March, before Trump imposed tariffs on auto imports. It has also forecast an earnings before interest and tax (ebit) margin of 5%-7% for its automotive segment.
“Our footprint in the US is helping us limit the impact of tariffs,” CFO Walter Mertl said in a statement. “Thanks to precise financial control, based on calculated forecasts, we are firmly on track to achieve our targets for the year at the six-month mark.”
Swift implementation
BMW said that it assumed that tariff negotiations were ongoing.
CEO Oliver Zipse welcomed the EU’s tariff deal with Trump, which is set to lower tariffs on both sides of the Atlantic, but stressed that swift implementation was key.
On a possible mechanism to offset imports and exports in exchange for tariff relief, which would benefit BMW, Zipse said his company would continue to push for this. Still, like his counterparts at Volkswagen and Mercedes, he added that any sector-wide deal was unlikely.
BMW exported about 225,000 vehicles produced at its Spartanburg, South Carolina, plant in 2024, while it sold about 400,000 units in the US market.
Zipse called the tariff debate “overblown” even though they are weighing on results, with separate tariffs imposed by Trump on steel and aluminium also affecting the auto sector more broadly.
China factor
EU tariffs on electric cars from China are also a problem for BMW, which produces its electric Mini there under a joint venture.
In 2025, the group expects a tariff-related impact of about 1.25 percentage points on its automotive segment’s profit margin. In the first half of the year, the impact was about 1.5 points.
During the second quarter, pretax earnings slumped 32% to €2.6bn, hurt by currency effects and a decline in sales for China. Sales there slumped 15.5% during the first half.
The quarterly earnings result was, however, slightly higher than analysts’ expectations.
The ebit margin for its auto division came in at 5.4%, just missing analysts’ forecast for 5.5% in a company-provided poll but within its 2025 target range.
Reuters
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