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BMW said its profits fell 36 per cent last year and warned that earnings were expected to remain at a similar level this year as EU and US tariffs weigh heavily on the carmaker.
The German group, which also makes the Rolls-Royce and Mini, said on Friday that 2024 earnings before taxes fell to €11bn, compared with €17bn the previous year. This was in line with a profit warning in September after slowing sales in the lucrative Chinese market and a recall of 1.5mn cars sold in the past two years due to potentially faulty brakes.
However, it added that earnings were not expected to recover this year and that tariffs enacted up to this week were likely to dent automotive margins by 1 percentage point.
Duties targeting Chinese electric vehicle imports into the EU, Mexican imports into the US and US aluminium tariffs were behind BMW’s guidance that automotive margins this year were expected to be in the range of 5 to 7 per cent, compared with 6.3 per cent last year.
It added that the impact of any potential future tariffs — the US has threatened duties on cars imported from Europe — had not been included in the guidance.
BMW is one of several western carmakers that has been hurt by EU tariffs on EV imports from China. Its electric Mini Cooper, for example, is produced in China and is subject to import duties of 20.7 per cent.
US President Donald Trump granted the car industry a 30-day reprieve on tariffs on goods from Mexico and Canada. But BMW is not part of the exemption because its cars are not compliant with the terms of a 2020 trade deal between the US, Canada and Mexico.
The company said it had been hardest hit by tariffs from the EU targeting China and US tariffs against Mexico, with each of these hitting it by a “mid-triple digit million amount”. US tariffs on aluminium had cost the company a “high double-digit million” figure. Tariffs on trade between the US and China cost it a “low triple-digit million”.
Chief executive Oliver Zipse on Friday said Germany and the US were BMW’s main export hubs.
The company’s plant in Spartanburg, South Carolina — BMW’s largest globally — last year exported cars worth €10bn, he said, while 56 per cent of the 1mn cars produced in Germany last year were shipped beyond the EU.
BMW’s figures for the fourth quarter showed net profit of €1.5bn, a 41 per cent fall on a year earlier.
Its share price, which has dropped more than a fifth in the past year, was down more than 2 per cent on Friday morning.
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