BMW Warns Of $1 Billion Hit From Tariffs, Slashes Outlook Due To Supply Woes

On Friday, luxury carmaker BMW — Bayerische Motoren Werke AG ADR BMWYY — posted a 2024 revenue decline of 8.4% to 142.38 billion euros.

The carmaker is grappling with an escalating trade war between the U.S. and the EU as President Donald Trump threatens higher tariffs on Europe’s car imports from April 2.

Here’s a breakdown of the report.

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• Automotive revenue declined 5.6% to 124.92 billion euros.
• Motorcycle revenue grew by 0.2% to 3.22 billion euros.
• Automotive deliveries declined by 2.3% to 2.2 million; MINI decreased by 17.1% to 240,000; Rolls Royce reduced by 5.3% to 5,712.
• Production declined by 4.8% to 2.23 million, MINI decreased by 11.5% to 0.28 million, and Rolls Royce reduced by 4.1% to 5,924.
• Net profit declined 36.9% to 7.68 billion euros.
• The Automobile EBIT margin declined from 9.8% to 6.3%. The Motorcycle EBIT margin decreased to 6.1% from 8.1%.
• EPS of 11.62 euros declined from 17.67 euros a year ago.

BMW held 19.29 billion euros in cash and equivalents as of Dec. 31, 2024. The company also cut its dividend to 4.30 euros from 6 euros it paid out for 2023.

BMW chair Oliver Zipse told Reuters it expects trade tariffs to cost the carmaker 1 billion euros ($1.09 billion) this year.

The carmaker expects its earnings margin for cars to be 5-7% in 2025, below a consensus estimate of 7.3%.

BMW proposed an increased payout ratio of 36.7%, consisting of a dividend of 4.32 euros per preferred share for 2024. That’s down from 6.02 euros paid out for the previous year.

BMW cut its 2024 margin outlook to 6%-7% from 8-10% in September. The comapny blamed slumping China sales and issues related to the Integrated Braking System (IBS) supplied by a vendor. 

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