STORY: BMW warned its earnings could take a more than $1 billion hit this year.
The German carmaker blamed newly imposed tariffs.
It comes as trade tensions escalate between China, Europe and the U.S.
BMW forecast an earnings margin for its cars segment of 5-7% for the year.
They factored in the impact of a full year of EU duties on its China-made electric vehicles.
They also included U.S. duties of 25% on steel and aluminum, and on vehicle imports to the U.S. from Mexico.
Tariffs looming from the EU and the U.S. would have a far greater impact on the carmaker.
BMW is also the highest auto exporter by value from the U.S.
BMW CEO Oliver Zipse.
“In the United States, one out of every two vehicles from our plant in Spartanburg, South Carolina is exported. Last year, we achieved an export value of over 10 billion U.S. dollars. This once again makes the BMW Group the largest automotive exporter in the United States by value. We benefit from an integrated global economy.”
It also exports over half its vehicles made in Germany outside the EU.
Executives struck an optimistic tone on Friday, though.
They said they don’t expect the tariffs to remain in place for the whole year, but added if the situation changes, so does their outlook.
Net profit slumped by more than a third last year to $8.3 billion, in line with market expectations.
The auto giant blamed weak sales in China and Germany as well as delivery hold-ups.
Fourth quarter profit dropped 41%.
That was also in line with BMW’s warnings that higher fixed costs from unwinding inventory would hit its earnings in the last three months of 2024.
BMW’s shares were slightly down after the update.
