BMW's CEO revealed that trade tariffs are projected to entail a 1 billion euro ($1.09 billion) cost for the carmaker this year due to EU levies and recent U.S. tariffs disrupting global commerce.
The company anticipates its car earnings margin to reach 5-7% by 2025, slightly below the 7.3% LSEG consensus, impacted by tariffs enacted by March 12.
CEO Oliver Zipse deemed the 1 billion euro provision for tariffs in the group's earnings as "conservative," expecting potential additional tariffs from the EU and U.S.
While acknowledging the impact of existing tariffs like the 25% steel and aluminum tariffs and those on BMW's U.S. vehicle imports, Zipse mentioned the possibility of changes throughout the year. CFO Walter Mertl stated, "If the situation changes, so does our outlook."
BMW's shares slid by 2.3% at 0803 GMT as investors reacted to the lower than expected margin for the group's autos segment.
The German automaker is at the forefront of the increasing U.S.-EU trade tensions, with President Donald Trump threatening tariffs on European car imports starting April 2, prompting European retaliation and calls for dialogue.
Notably, BMW exports 56% of the vehicles produced in Germany outside the EU, and its South Carolina plant sends cars valued at over $10 billion, making it the largest U.S. automotive exporter by value, according to CEO Zipse.
In 2024, BMW's net profit dropped by over a third to 7.68 billion euros ($8.32 billion) in line with market forecasts, as weak sales in China and Germany impacted performance.
The proposal for a higher payout ratio of 36.7%, among the group's highest in history, suggests a dividend of 4.32 euros per preferred share for 2024, reduced from the previous year's 6.02 euros.
In September, BMW adjusted its EBIT margin forecast to 6-7% from 8-10% due to declining sales in China and issues with a brake system supplied by Continental, affecting 1.5 million cars.
($1 = 0.9217 euros)