BMW forecasts tariff regime will ease from summer, shares spark
By Abigail Townsend
Date: Wednesday 07 May 2025
(Sharecast News) - Shares in BMW Group sparked on Wednesday, after the German car giant posted above-forecast numbers and predicated that at least some of Donald Trump's sweeping tariffs would likely be temporary.
First-quarter revenues fell 7.8%, to €33.76bn, largely due to increasing competition in BMW's core Chinese market.
Earnings before interest and tax were 22.5% lower at €3.14bn. Within that, however, automotive sales - BMW's biggest division - were €2.02bn, ahead of analyst expectations for €1.85bn.
The unit's operating margin also beat forecasts, at 6.9%. Consensus had been for 6.3%.
BMW said: "Attractive products, strong order volumes and strict cost discipline have ensured a start to the year according to plan."
The group also confirmed its full-year outlook, despite the impact of tariffs.
Trump has announced a swingeing 25% tariff on the imports of foreign-made cars, alongside a raft of regularly-changing levies on other sectors and countries.
BMW acknowledged the regime would have a "notable" impact on second-quarter results, and flagged that an associated potential rise in inflation, as well as uncertainty among both consumers and business, could "weigh on global growth".
But longer-term, the Munich-based firm took a more hopeful approach.
It said: "The BMW Group expects some of the tariff increases to be temporary, with reductions from July. The forecast also includes mitigating measure to offset the impact of higher tariffs."
Oliver Zipse, chief executive, told reporters that the company's large production footprint in the US would likely "have an effect" in negotiations with the White House. BMW was America's top car exporter by value in 2024.
"There are lots of negotiations behind the scenes," he said. "We can see that our large footprint there will not be ignored."
BMW also flagged "sustained" demand for its premium vehicles, meaning it was able to confirm "slight" sales growth for the year, with fully-electric vehicles contributing to a slightly higher share of deliveries.
Group earnings before tax were forecast to be largely unchanged on the previous year.
As at 1300 BST, shares in BMW were 2%, having earlier put on 4%.
Russ Mould, investment director at AJ Bell, said: "In an environment where its peers have been withdrawing guidance left, right and centre, BMW's decision to stick with guidance was well-received by the market.
"That doesn't mean life will be easy for BMW. It must steer an uncertain course through the transition to electric vehicles, the impact of tariffs on global supply chains and the impact of uneven consumer confidence on demand."
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