BMW's quarterly profit down 25 percent as China, tariffs weigh

German premium carmaker BMW reported a sharp drop in first-quarter earnings as intense competition in China and tariff pressures weighed on performance, although it maintained its 2026 outlook for now.

The company said on Wednesday that quarterly pretax earnings fell 25 percent to 2.3 billion euros (HK$21.14 billion), slightly above analysts' forecast of 2.2 billion euros in a company-provided consensus.

Group revenue missed expectations, falling by 8.1 percent to 31.0 billion euros.

Rivals Mercedes-Benz and Audi also reported a difficult start to 2026, as the threat of higher US tariffs looms and Chinese competitors assert their dominance in the world's largest auto market while starting to build their market share in Europe.

Like many carmakers, BMW is turning to cost reductions to offset pressures from tariffs and high costs for raw materials in a globally weak automotive market.

Unlike Volkswagen and Mercedes, however, it has so far managed to do so without cutting jobs.

BMW's EBIT margin in its core automotive business stood at 5.0 percent in the first quarter, down from 6.9 percent a year earlier but ahead of analysts' forecast of 4.7 percent.

Tariffs, including US levies but also an EU tariff on EVs made in China affecting BMW's Mini brand, had a 1.25-percentage-point impact on BMW's car margin in the first quarter.

The company maintained its full-year guidance on Wednesday, forecasting a moderate decline in its group result. BMW's core operating margin is seen in a range of 4 percent to 6 percent after 5.3 percent in 2025.

The outlook does not incorporate a potential increase in US auto tariffs, which President Donald Trump threatened on Friday to raise to 25 percent from the current 15 percent. It also assumes the Middle East conflict "will not be enduring," the company said in a statement.

Reuters

 

𝗗𝗼𝘄𝗻𝗹𝗼𝗮𝗱 𝗧𝗵𝗲 𝗦𝘁𝗮𝗻𝗱𝗮𝗿𝗱 𝗔𝗽𝗽 ↓