The German automaker's pretax earnings fell to €2.3 billion, but its core automotive margin topped analyst forecasts
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First-quarter pretax earnings at BMW came in at €2.35 billion, roughly 25% below the year-ago figure, with pressure from a bruising pricing environment in China and the bite of U.S. tariffs both contributing to the decline. The company said group revenue fell 8.1% to €31 billion, while net profit declined 23.1% to €1.67 billion.
The results still cleared the bar set by analysts. Pretax earnings of €2.35 billion came in above an analyst consensus of €2.2 billion, according to Reuters. On the margin front, the automotive segment's EBIT rate came to 5.0% — a decline from 6.9% in the prior-year quarter, though still better than the 4.7% analysts had penciled in, according to Reuters. BMW stock rose about 5% following the results.
The combined weight of tariffs shaved 1.25 percentage points off the automotive segment's EBIT margin during the quarter, the company said, reflecting both existing U.S. import duties on vehicles and E.U. charges on Chinese-made electric vehicles that fell on the Mini brand. The automotive segment posted EBIT of €1.35 billion, down 33.5% from a year earlier, with an EBIT margin of 5.0% — within the company's full-year guidance range of 4% to 6%.
In China, BMW's largest single market, overall deliveries fell 10% during the quarter against a total market that contracted 17.5%, the company said. Global automotive deliveries totaled 565,780 vehicles, a 3.5% decline, with the BMW brand accounting for 496,006 of those, down 4.6%.
Speaking to reporters, Zipse cast Trump's threatened 15%-to-25% hike on E.U. auto imports as a pressure tactic rather than a firm policy move — one designed to push Brussels into honoring the trade deal the two sides concluded last summer, according to Bloomberg. Raising tariffs to that level would cost BMW an additional €540 million, according to Bloomberg. Zipse said there was "a lot of support" from the Trump administration for an offset mechanism that would benefit companies that both import vehicles into the U.S. and export them from American factories.
BMW confirmed its full-year guidance, projecting an automotive EBIT margin in the 4% to 6% range and a moderate decline in group pretax earnings for 2026. The company said free cash flow in the automotive segment rose 88.1% to €777 million in the quarter and is expected to exceed €4.5 billion for the full year.
On costs, BMW reduced capital expenditure by 38.9% to €1.72 billion and cut research and development spending 11.5% to €1.76 billion in the quarter. CFO Walter Mertl said improvement is expected in the second half of the year as the company rolls out its next-generation Neue Klasse electric vehicle lineup, according to Bloomberg.
Leadership at BMW is also set to change: Nedeljkovic, who oversees the company's manufacturing operations, will take the top job when Zipse exits later this month, capping a tenure of close to seven years, according to Bloomberg.
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