German premium carmaker BMW reported a sharp drop in first-quarter earnings as intense competition in China and tariff pressures weighed on performance, although it maintained its 2026 outlook for now.
The company said on Wednesday that quarterly pretax earnings fell 25% to €2.3bn (R44.57bn), slightly above analysts’ forecast of €2.2bn (R36.31bn) in a company-provided consensus.
Group revenue missed expectations, falling by 8.1% to €31bn.
Rivals Mercedes-Benz and Audi also reported a difficult start to 2026, as the threat of higher US tariffs looms and Chinese competitors assert their dominance in the world’s largest vehicle market while starting to build their market share in Europe.
Like many carmakers, BMW is turning to cost reductions to offset pressures from tariffs and high costs for raw materials in a globally weak automotive market.
Unlike Volkswagen and Mercedes, however, it has so far managed to do so without cutting jobs.
BMW’s earnings before interest and tax (ebit) margin in its core automotive business stood at 5.0% in the first quarter, down from 6.9% a year earlier but ahead of analysts’ forecast of 4.7%.
Tariffs, including US levies but also an EU tariff on EVs made in China affecting BMW’s MINI brand, had a 1.25-percentage-point impact on BMW’s car margin in the first quarter.
The company maintained its full-year guidance on Wednesday, forecasting a moderate decline in its group result. BMW’s core operating margin is seen in a range of 4%-6% after 5.3% in 2025.
The outlook does not incorporate a potential increase in US vehicle tariffs, which President Donald Trump threatened on Friday to raise to 25% from the current 15%. It also assumes the Middle East conflict “will not be enduring”, the company said in a statement.
Reuters
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