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BMW has reported a 36 per cent fall in profits last year following weak demand in China and a global recall of cars and has warned it expects earnings will remain at a similar level this year because of new European and US tariffs.
The carmaker, which also makes the Rolls-Royce and Mini, on Friday said 2024 earnings before taxes fell to €11bn, compared with €17bn the previous year.
This was in line with a profit warning issued 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.
The German company warned that earnings were not expected to recover this year, pointing to “the effects of the tariff increases that came into force up to March 12”. It did not give details of the predicted effect of tariffs enacted after this date.
BMW is one of several carmakers that has been hurt by EU tariffs on electric vehicle imports from China. Its electric Mini Cooper, for example, is produced in China and is now subject to import duties of 20.7 per cent.
BMW’s chief financial officer Walter Mertl said tariffs already in place were expected to reduce its automotive margins by 1 percentage point.
BMW’s automotive margins fell to 6.3 per cent in 2024, compared with 9.8 per cent last year. It said it expected a figure of between 5 and 7 per cent this year, citing headwinds including a “continued challenging situation in China, tariff increases” and resulting supply chain mitigation costs.
BMW’s share price, which has fallen more than a fifth in the past year, was down more than 2 per cent on Friday morning.
