BMW first-quarter net profit plunges 23% on China competition and US tariffs

BMW reported a 23.1% drop in first-quarter net profit to 1.67 billion euros ($1.96 billion) on Wednesday, as the German carmaker faced intense competition in China and the impact of US tariffs.

The company's core profit margin in the automotive segment fell to 7.6% from 9.2% in the same period a year earlier. BMW cited "fierce competition across major automotive markets, especially in China," which it said "impacted pricing and sales volumes."

BMW Group sales volume in China declined 10% in the first three months of the year. That outperformed the broader Chinese market, which shrank by 17.5% over the same period, but BMW's deliveries in the country last year were already at their lowest level since 2017.

US tariffs on cars and car parts led to "a significantly larger hit than the same quarter in the previous year, in which only EU import tariffs were due on battery-electric vehicles from China," BMW said. Imports of European cars into the United States are subject to a 15% tariff under a partially implemented EU-US deal unveiled last July. US President Donald Trump said last week he would raise the rate to 25%, charging that the bloc had not upheld its side of the bargain.

BMW operates its largest plant in Spartanburg, South Carolina, which means it pays increased US duties on some car parts. Total tariffs — including EU duties on Chinese-made electric cars that affect BMW's electric Mini as well as tariffs on BMW's US exports — cost the company roughly 1.75 billion euros last year, the group said in March.

BMW maintained its full-year outlook, expecting a "moderate decline" in earnings before tax, but warned it was bracing for "a higher level of volatility related to tariffs."

The war in the Middle East added to uncertainty, BMW said, by raising energy prices, shipping costs and the price of industrial inputs such as plastics and aluminium. The company said its guidance assumes the Middle East conflict does not endure.