BMW AG’s profitability declined in the second quarter as lower sales in China and extra costs from President Donald Trump’s trade war weighed on the German luxury carmaker’s earnings.The automotive operating margin fell to 5.4% in the three months through June — still within its guidance range for the year and slightly above analyst expectations. BMW expects tariffs to drag down the margin by 1.25 percentage points in 2025.
The shares fell as much as 2.1% early Thursday, July 31, in Frankfurt, but they’ve gained 6.2% so far this year.
The carmaker confirmed its full-year outlook of an auto margin of at least 5%, making it an exception among European automakers this earnings season. Over the past week, Porsche AG, its parent Volkswagen AG, and Mercedes-Benz Group AG all scaled back their earnings expectations after tallying the cost of President Donald Trump’s trade war.BMW has been faring somewhat better than Mercedes in the transition to battery-powered cars, with its EV sales rising 16% in the first half. Chief Executive Officer Oliver Zipse wants to continue the trend as the company prepares to unwrap the first of its Neue Klasse EVs in September. Still, BMW and its German peers are losing ground in Chinawhere increasingly competitive domestic manufacturers led by BYD Co. are squeezing both volume and pricing.
The shares fell as much as 2.1% early Thursday, July 31, in Frankfurt, but they’ve gained 6.2% so far this year.
The carmaker confirmed its full-year outlook of an auto margin of at least 5%, making it an exception among European automakers this earnings season. Over the past week, Porsche AG, its parent Volkswagen AG, and Mercedes-Benz Group AG all scaled back their earnings expectations after tallying the cost of President Donald Trump’s trade war.BMW has been faring somewhat better than Mercedes in the transition to battery-powered cars, with its EV sales rising 16% in the first half. Chief Executive Officer Oliver Zipse wants to continue the trend as the company prepares to unwrap the first of its Neue Klasse EVs in September. Still, BMW and its German peers are losing ground in Chinawhere increasingly competitive domestic manufacturers led by BYD Co. are squeezing both volume and pricing.
The European Union’s recent trade deal with the US lowers duties on auto imports from the bloc to 15%. That’s well below the earlier 27.5% levy but far higher than the 2.5% tariff in place before Trump’s new trade policies.
BMW said Thursday that its outlook also includes mitigating measures to dampen the impact of the duties. The company operates its biggest factory globally in South Carolina and in April said it’s considering additional shifts there to increase output.
