BMW Q1 Profit Falls 23% — Is China No Longer Buying German Luxury?

BMW AG saw its first-quarter earnings plunge 23%, hit by declining sales in China and mounting concerns over evolving global trade policies, according to a report filed by Bloomberg. The German carmaker posted earnings before interest and taxes (EBIT) of €3.14 billion ($3.6 billion), marking its weakest Q1 performance since 2022. BMW’s core automotive profit margin narrowed to 6.9%.

China, the automaker's largest single market, was a significant drag. Sales there fell 17% in the first quarter—the worst Q1 showing since 2020. German luxury brands like BMW and Mercedes-Benz continue to lose share to Chinese manufacturers, with BYD leading the charge in the EV and luxury segments.

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Meanwhile, the re-emergence of US tariff threats—particularly from former President Donald Trump’s proposed trade policies—is adding another layer of pressure. While BMW has retained its full-year guidance, it acknowledged the growing uncertainty surrounding international trade.

Mercedes-Benz and Stellantis NV have already withdrawn their outlooks, and Volkswagen AG said it has yet to assess the full impact of potential new levies.

BMW Group CEO Oliver Zipse estimated in March that US. tariffs on imports from countries like Mexico, Canada, and China could cost BMW around €1 billion this year. The company is considering increasing production shifts at its Spartanburg, South Carolina plant to help absorb the financial blow.

Still, BMW expects some relief by midyear, forecasting that certain tariffs could be scaled back starting in July. The carmaker also anticipates that softening inflation and possible interest-rate cuts will spur demand in several markets.

On a brighter note, electric vehicles proved a strong performer for BMW. EV sales rose 32% globally and jumped 64% in Europe. According to Bloomberg, traditional automakers like BMW appear to be benefiting from waning enthusiasm for Tesla, as its CEO Elon Musk faces backlash over his political ties and vocal support of far-right groups in Europe.