US tariffs and a difficult business environment in China caused BMW's profit to fall by more than a quarter in the first half of the year. After taxes, the Munich-based company earned only four billion euros. This is 29% less compared to the same period last year and marks the third consecutive drop in the first half. Despite these challenges, BMW still appears more stable than other German car companies. Volkswagen and its brand Audi both lost more than a third of their profit in the first half, while Mercedes-Benz lost more than half.
BMW's CEO, Oliver Zipse, said that the half-year results show how strong their business model is. Unlike Mercedes and Audi, BMW's sales stayed almost the same, selling 1.2 million cars. However, their revenue dropped by 8% to 67.7 billion euros. Tariffs have certainly affected BMW. The company hasn't said how much the US tariffs cost them in the first half. Competitor Audi estimated its tariff costs at around 600 million euros. BMW has an advantage because it has its own factory in the US, which produces about half of the cars sold there. Another 200,000 cars are sent to other countries. If tariffs on cars exported from the US to Europe are reduced from ten percent to zero, as is being discussed, BMW would benefit. However, this wouldn't fully make up for the 15 percent tariffs on exports to the US.
Chief Financial Officer Walter Mertl said that the BMW Group's business model remains strong "despite the burden of tariffs." He added that their presence in the US helps limit the effects of tariffs. Based on the half-year results, the company is "strictly staying on course" to meet its yearly goals, helped by high efficiency and better cost management. Besides US tariffs, German carmakers are also struggling with a price war in the Chinese market, especially for electric cars. Most have started programs to cut jobs, but BMW has avoided this. BMW is now focusing on its "Neue Klasse" (New Class) of cars. The first production model will be shown in September at an international car show. CEO Oliver Zipse stated, "With the BMW iX3, we are announcing the start of production for an unprecedented product. Also, by 2027, we will launch over 40 new and updated models in all segments and with all engine types."
