Earnings before interest and tax came in at €3.14 billion ($3.6 billion), the German manufacturer said Wednesday, the weakest first-quarter result since 2022. BMW’s carmaking margin declined to 6.9%.
German carmakers, including BMW and Mercedes-Benz Group AG are struggling to reclaim market share in China as local brands led by BYD Co. dominate electric-vehicle sales and continue to push deeper into the luxury segment. BMW’s sales in China fell 17% in the first three months of the year, the worst first-quarter performance since 2020.
Meanwhile, President Donald Trump’s tariffs are adding another threat to profits. BMW left its financial guidance unchanged for the year, but acknowledged that the trade tensions have increased uncertainty. Mercedes and Stellantis NV scrapped their guidance because of the chaos caused by the fast-changing tariff policies, while Volkswagen AG warned it wasn’t yet factoring in the impact of new levies.
Chief Executive Officer Oliver Zipse said in March that US duties on imports from Mexico, Canada and China will cost the carmaker about €1 billion this year. To help reduce the impact, BMW is weighing adding shifts at its US plant in Spartanburg, South Carolina.
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The carmaker, though, sees some of the tariff increases as temporary and expects reductions starting in July. BMW also forecasts that stabilising inflation and moderate interest-rate cuts will boost demand in several markets this year.
EVs offered a bright spot for BMW in the first quarter, with sales rising 32% from a year ago overall and 64% in Europe. BMW and others appear to be benefiting from consumers’ aversion to Tesla Inc. after Elon Musk became more involved in the Trump administration and supported far-right political movements in Europe.
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(Edited by : Juviraj Anchil)