BMW Anticipates Ongoing Challenges Amidst Profit Decline and Trade Tensions
BMW has reported a 37% decline in net profits for 2024, attributing it to trade tensions and weak demand, particularly in China. The company’s revenues also fell by over 8%. Challenges are expected to persist into 2025, influenced by ongoing tariff discussions and competition from local Chinese manufacturers.
BMW, the distinguished German automotive manufacturer, issued a cautionary statement on Friday regarding persistent challenges anticipated in 2025. These challenges arise from ongoing trade conflicts and tepid demand in China, following a significant decline in profits for the preceding year. Specifically, the company’s net profit for 2024 diminished by 37 percent, amounting to 7.7 billion euros (approximately $8.3 billion). Furthermore, revenues experienced a decline exceeding eight percent, totaling 142.4 billion euros.
This warning places BMW alongside other German auto manufacturers, all grappling with notably reduced profits amidst a turbulent shift towards electric vehicles, coupled with declining demand in the crucial Chinese market. BMW has projected that its earnings before taxes for 2025 will mirror the subdued levels anticipated for 2024, with trade policy fluctuations playing a critical role in these projections.
The company stated, “The continued challenging situation in China and tariff increases… are expected to provide headwinds.” This remark underscores the company’s concern regarding the impact of U.S. tariff policies. Under the aggressive trade strategy of former U.S. President Donald Trump, the possibility of imposing a 25-percent tariff on imports from the European Union posed significant threats to the region’s automotive sector. Previous tariff impositions on Canada and Mexico were also mentioned, with partial rollbacks following major opposition from U.S. car manufacturers.
Additionally, the interconnected nature of the automotive supply chain within the region means that U.S. tariffs could adversely affect European automakers. BMW noted that its updated forecasts incorporate existing tariff measures, while signaling that any further increases in duties could detrimentally impact business. The slump in demand from China, where European brands have struggled against locals such as BYD, notably hindered BMW’s earnings in 2024. Vehicle deliveries in China fell by 13.4 percent last year, contributing to an overall decline of four percent in total deliveries for the BMW group, which includes brands such as Mini and Rolls-Royce.
In conclusion, BMW’s forecast reflects serious concerns regarding persistent challenges from trade policies and diminishing demand in key markets, particularly China. The Group’s recent profit figures illustrate the difficulties faced by the automotive industry during a transformative period. Continued monitoring of trade relations and market dynamics will be essential as the company navigates these obstacles moving forward.
Original Source: www.news-expressky.com
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