BMW AG (ETR:BMW) shares were flat in early trading in Frankfurt on Friday after the carmaker warned that profit margins would take a hit from US tariffs and escalating trade tensions.
The company expects its automotive earnings margin to be between 5-7% this year, below analysts’ forecasts of 7.3%. Tariffs imposed by the Trump administration on imports, including BMW vehicles from Mexico, have already reduced its margin by one percentage point.
BMW relies heavily on exports, with more than half of the cars made in Germany going outside the EU. Its South Carolina plant is the largest US. automotive exporter by value. CEO Oliver Zipse reaffirmed the company’s commitment to open markets and free trade.
Net profit fell by a third in 2024 to €7.68 billion due to weak sales in China and Germany, as well as supply chain disruptions. Despite this, BMW proposed a higher payout ratio, with a €4.32 dividend per preferred share.