BMW's earnings decline in the automotive sector
In the first half of 2025, BMW, along with Volkswagen, Audi, and Mercedes-Benz, faced significant profit declines. The primary culprits were tariffs on US imports, intensified competition from local Chinese rivals, and cost pressures related to steel, aluminum, and electric vehicle (EV) imports, particularly from China.
Tariffs on US imports significantly impacted the margins of these German automakers. For instance, VW Group’s operating profit fell by 29% in H1 2025, with €1.3 billion lost due to US import tariffs in Q2 alone. BMW, too, felt the pinch, with a 32% decrease in Q2 net profit, and tariffs pushing down profit margins by two percentage points in the auto segment, contributing notably to their profit plunge.
Competition in China also took a toll on sales and profits. BMW reported a 14% drop in China sales amid fierce competition from local brands like BYD, which pressured profit margins. Audi experienced a 37.5% profit drop, partially attributed to tariff impacts and challenges in China.
However, BMW's larger footprint in US vehicle manufacturing, particularly through its Spartanburg, South Carolina plant, helped it weather the tariff storm better than its peers. This allowed BMW to increase US deliveries by 1.4% during Q2 despite tariffs, positioning it more stably than Volkswagen, Audi, and Mercedes-Benz, which were more exposed to tariff effects on exports from Europe and Mexico.
Despite the 32% decline in Q2 profit, BMW maintained its full-year forecast for 2025 EBIT margin between 5% to 7% and expected earnings before tax in 2025 to be on par with the previous year. This shows more confidence than VW and Audi, which revised outlooks downward due to rising trade barriers.
While BMW faced challenges in China, it has not been detailed further in the article. Additionally, the weak dollar's impact on BMW's profits is not elaborated. However, it is clear that BMW remains in a stronger position than other German automakers mentioned in the article.
The article does not provide information about BMW's market share or sales figures for the first half of the year. Furthermore, it does not provide specific information about the profits of other German automakers besides VW, Audi, and Mercedes-Benz. Lastly, the article does not provide information about BMW's profit expectations for the second half of the year.
Other industries beyond automotive were also affected by the intensified trade tensions in 2025. For instance, the finance sector experienced a 12% decline in investments from US-based companies due to tariffs on imports, leading to a significant slowdown in growth. Moreover, the transportation industry saw an increase in costs as a result of tariffs on steel and aluminum imports from China, which impacted manufacturers like BMW and the broader automotive sector.
