Frankfurt (Germany) (AFP) – German premium carmaker BMW said Wednesday that it expected to largely ride out the impact of US tariffs over the coming year, and that it hoped to soften their impact. CEO Oliver Zipse told reporters on a call that BMW was lobbying hard for free trade and expected some success thanks to its worldwide footprint. “We are advocating this at various political levels in our markets,” he said. “People listen to us attentively and our arguments are well received.”
Zipse added that he expected tariffs imposed by US President Donald Trump on Canada and Mexico to eventually be rolled back. “We assume that the North American free trade zone will be restored because these countries are far too interdependent,” he said. “The costs for everyone are far too large.” Trump has threatened and imposed a range of tariffs in a bid to boost American manufacturing, including a 25 percent levy on many car imports in effect since April. But he has also proven flexible, pausing previously-announced punitive tariffs and adding some carveouts to the car duties.
BMW has its largest site in South Carolina in the United States, and the plant last year exported vehicles worth over $10 billion (8.8 billion euros). The company stuck with its guidance for the year and expects earnings before taxes (EBT) for 2025 to be level with that of 2024, driven by demand for its pricier motors. In a statement, BMW said it expects “some of the tariff increases to be temporary, with reductions from July 2025.” BMW’s guidance only takes into account tariffs in effect up to March 12. About half of its US sales are imports from Europe, Mexico, and South Africa.
For the first quarter, BMW reported a net profit of 2.17 billion euros and earnings before taxes of 3.11 billion euros. EBT beat expectations of 2.85 billion euros forecast in a company poll of analysts. Those figures nevertheless fell by about 25 percent on the previous year, with BMW struggling in key market China in the face of local rivals such as BYD. BMW also took a hit in the “low three-digit million euro range” in the first quarter as a result of tariffs imposed on Chinese electric vehicles by the EU in October, it said. The company makes electric cars under its Mini brand in the country.
The company’s shares were up 3.5 percent in Frankfurt after the results were released.
© 2024 AFP
