BMW’s Q1 profit down 25% as China, tariffs weigh
But at 2.3 billion euros, the figure is slightly above analysts’ forecast of 2.2 billion euros
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[BERLIN] German premium carmaker BMW reported a sharp drop in first-quarter earnings, as intense competition in China and tariff pressures weighed on its performance – although it maintained its 2026 outlook for now.
The company said on Wednesday (May 6) that quarterly pretax earnings fell 25 per cent to 2.3 billion euros (S$3.4 billion), slightly above analysts’ forecast of 2.2 billion euros in a company-provided consensus.
Group revenue missed expectations, falling by 8.1 per cent to 31 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 car market while starting to build their market share in Europe.
Like many carmakers, BMW is turning to cost reductions to offset the pressures from tariffs and high costs of raw materials in a globally weak automotive market.
However, it has so far managed to do so without cutting jobs, unlike Volkswagen and Mercedes.
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BMW’s earnings before interest and taxes margin in its core automotive business stood at 5 per cent in Q1, down from 6.9 per cent in the year-ago period, but ahead of analysts’ forecast of 4.7 per cent.
Tariffs, including US levies and an EU tariff on electric vehicles made in China affecting BMW’s Mini brand, had a 1.25 percentage-point impact on the company’s car margin in Q1.
It maintained its full-year guidance on Wednesday, forecasting a moderate decline in its group result.
BMW’s core operating margin is anticipated to be in a range of 4 to 6 per cent after 5.3 per cent in 2025.
The outlook does not incorporate a potential increase in US car tariffs, which US President Donald Trump threatened on Friday to raise to 25 per cent from the current 15 per cent.
It also assumes the Middle East conflict “will not be enduring”, the company said. REUTERS
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