BMW profits slump as China woes and US tariffs bite

BMW Faces Third‑Quarter Profit Decline Amid China Sales Fall and US Tariffs

Net Profit Slumps 32% to 1.8 Billion Euros

The Munich‑based premium carmaker reported that its net profit for the April‑June period plunged 32 percent from a year earlier, totalling 1.8 billion euros ($2.1 billion).

Revenue Down 8% to 34 Billion Euros

BMW’s total revenues slipped 8 percent, reaching 34 billion euros, largely due to a 14 percent decline in sales in China.

China Sales Hit by Local Rivalry and EV Competition

German automakers are contending with fierce competition from domestic rivals, especially in the electric‑vehicle segment.

US Import Taxes Further Reduce Earnings

U.S. import taxes on cars and vehicle components, introduced by President Donald Trump in April as part of his tariff blitz, also took a bite out of BMW’s earnings. The group did not disclose a precise figure.

Margins Expected to Contract by 1.25 Points this Year

BMW said it anticipates the levies to reduce the profit margins on its car sales this year by 1.25 percentage points.

2025 Targets Remain Unchanged

The manufacturer 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.

Other German Automakers Also Hurting

Volkswagen and Mercedes‑Benz have also been hammered by Trump’s tariff onslaught and ongoing problems in China.

Finance Chief Maintains “Business Model Intact”

Despite the poor results, BMW finance chief Walter Mertl insisted that the carmaker’s “business model remains intact.”

US Footprint Helps Mitigate Tariff Impact

“Our footprint in the U.S. is helping us limit the impact of tariffs,” he said. BMW has a factory in South Carolina and continues to export around half of its cars destined for U.S. customers to the United States, mainly from Europe and Mexico.

U.S. Import Tariffs and Upcoming Trade Deal

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. This is far above the rate seen in the past.