Frankfurt (Germany) (AFP) – BMW said Thursday its profits slumped by a third in the second quarter as the German premium carmaker was hit hard by falling sales in key market China and US tariffs. Net profit for the April-June period plunged 32 percent from a year earlier to 1.8 billion euros ($2.1 billion), the manufacturer said in a statement. Revenues slipped eight percent to 34 billion euros as sales fell 14 percent in China, where German carmakers are facing fierce competition from local rivals, particularly when it comes to electric vehicles.
US import taxes on cars and vehicle parts, introduced by US President Donald Trump in April as part of his tariff blitz, also hit earnings, the group said, without giving a precise figure. However, BMW said it expects the levies to reduce the profit margins on its car sales this year by 1.25 percentage points. The group stuck to its 2025 targets, forecasting a profit margin of between five and seven percent for its vehicle sales, similar to the 6.3 percent level recorded last year.
BMW is the latest German auto titan to report poor earnings in recent days, with Volkswagen and Mercedes-Benz also hammered by Trump’s tariff onslaught and ongoing problems in China. Despite the poor results, BMW finance chief Walter Mertl insisted that the carmaker’s “business model remains intact.” “Our footprint in the US is helping us limit the impact of tariffs,” he said.
The Munich-based group has a factory in South Carolina. Nevertheless, it continues to export around half of its cars destined for US customers to the United States, mainly from Europe and Mexico. Car imports into the United States have since April been subject to a 27.5 percent tariff, although this will be reduced to 15 percent from August after Trump and the European Union struck a trade deal. However, this is far above the rate seen in the past.
© 2024 AFP
