Summary
- BMW’s U.S. presence mitigates tariff impact
- Pre-tax earnings hit by China woes
- EBIT margin in auto segment on target
BERLIN, (Reuters) – Germany’s BMW maintained its full-year guidance on Thursday despite U.S. tariffs and quarterly earnings dropping by a third, arguing that its large manufacturing presence in the country gives it an edge over rivals.
By contrast, Volkswagen and Mercedes-Benz have cut their outlooks.
European automakers are still digesting a new 15% tariff agreed between the European Union and U.S. President Donald Trump, which is 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 United States and is the Germany’s top auto 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 11 billion euros ($12.6 billion).
That’s despite issuing its initial forecast in March before Trump imposed tariffs on auto imports.
It has also forecast an EBIT margin for its automotive segment of 5.0-7.0%.
“Our footprint in the U.S. 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,” he added.
BMW also said that it assumed tariff negotiations were ongoing and its forecast was factoring in some mitigation of the measures.
In 2025, the group expects a tariff-related impact of around 1.25 percentage points on its automotive segment’s profit margin. In the first half of the year, the impact was some 1.5 points.
During the second quarter, pretax earnings slumped 32% to 2.6 billion euros, 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 of 5.0% to 7.0%.
($1 = 0.8731 euros)
Reporting by Rachel More, Editing by Miranda Murray and Edwina Gibbs
Source: worldautoforum.com
