BMW Posts 29 Percent Decline in Profits
(MENAFN) German carmaker BMW has reported a significant profit slump in the first half of the year, as U.S. trade tariffs, declining global demand, and surging competition from Chinese manufacturers severely impacted its financial results.
The automaker recorded a post-tax profit of €4 billion ($4.6 billion), a sharp 29% decrease compared to the same period last year, according to a report released Thursday. This marks the third straight year BMW has seen its first-half earnings decline.
The company cited U.S. import tariffs on cars and parts—introduced by President Donald Trump in April—as a major drag on profitability.
Automakers across the European Union are still adjusting to a newly implemented 15% tariff, established through a recent agreement between Washington and Brussels, set to take effect in August. The deal, signed Sunday, has drawn harsh criticism from within the EU. Several European officials have condemned the agreement as “scandalous” and “a disaster,” arguing it granted no meaningful concessions from the U.S.
While BMW did not specify the exact financial hit from the American tariffs, it warned that trade-related expenses could reduce its automotive margin by up to 1.25 percentage points this year—potentially costing the company billions.
CEO Oliver Zipse expressed cautious approval of the tariff agreement but stressed that the duties continue to weigh on exports and ultimately harm consumers.
The company also highlighted growing “competitive pressure,” especially from Chinese automakers gaining ground in global markets.
Meanwhile, rival German manufacturers have posted even more severe losses. Earnings at Volkswagen and Audi each dropped by more than a third, while Mercedes saw profits nosedive by over 50%.
The broader slump in the automotive industry has intensified concerns about Germany’s economic outlook. The country entered a recession last year, and the IMF now forecasts zero growth for 2025—marking the weakest performance projected among G7 economies.
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