BMW posts 37% drop in annual net profit, warns of ‘subdued’ Chinese demand

BMW‘s net profits slumped by more than a third in 2024, flagging “continuing subdued demand in the Chinese market.”

Net profit for the year fell by an annual 36.9% to 7.68 billion euros ($8.32 billion). The print was in line with an LSEG forecast, according to Reuters.

Shares were trading 2% lower at 8:57 a.m. London time on Friday.

The car maker said that it expects an earnings margin for cars of around 5% to 7% in 2025, compared with 6.3% achieved last year, but noted that the implementation of tariffs was set to have a negative impact on earnings in the year ahead.

“A challenging competitive environment and macroeconomic, trade and geopolitical developments could all have a significant impact on business performance,” the company said in a statement.

The company’s forecasts account for all tariffs imposed up to March 12, including levies on U.S. steel and aluminum imports, and tariffs of 20% on imports from China and of 25% on imports from Canada and Mexico.

BMW’s chief financial officer said that added tariffs on U.S. imports imposed up until that date would lower its autos earnings margin by one percentage point, according to Reuters, citing a copy of a speech due to be delivered to investors later Friday.

The automaker said that it expects an ongoing “challenging situation in China,” while also naming tariff hikes and “ongoing support measures for the supply chain” as headwinds this year.

BMW deliveries totaled around 2.45 million units last year, slightly down from the 2.55 million of 2023. The company largely attributed the decline to delivery stops linked to a faulty braking system supplied by Continental, which last year prompted the carmaker to lower its full-year outlook.

On Friday, BMW CEO Oliver Zipse told “Squawk Box Europe” that tariffs may have been a good instrument decades ago, when global markets were not as interconnected as they are today — but he criticized their use in the modern world.

“Everything is connected with everything [today], the world will see very quickly that this might not be the smartest way to improve your competitiveness,” he said. “There [are] strong signs at the same time that there’s a future for free trade. We will see in the next 12 to 18 months a shift in attitude toward tariffs, I’m almost sure.”