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Q2 Profit Falls by a Third
German automaker BMW reported a steep drop in profits for the second quarter of 2025, with net earnings falling by around one-third to €2.6 billion. Revenue also declined, down 8.2% year-over-year to €34 billion. Despite the disappointing figures, BMW CEO Oliver Zipse confirmed that the company remains on track to meet its full-year targets.
CEO Stresses Long-Term Strategy
Zipse emphasized the strength of BMW’s business model, noting the company’s resilience amid global economic challenges. “Our performance in the first half of 2025 once again underscores how robust our business model is,” he stated. “By 2027, we will launch more than 40 new or updated models across all segments and drive systems.”
Industry-Wide Challenges
BMW is not alone in facing financial headwinds. German rivals Volkswagen and Mercedes-Benz have also reported significant declines in profits, citing the same underlying issues: increased tariffs and weakening sales in the critical Chinese market. On Wednesday, Porsche CEO Oliver Blume announced that the brand plans to ramp up investment in combustion engine vehicles again.
BMW Stands by Its Current Direction
In contrast, BMW’s Chief Financial Officer Walter Mertl said the company sees no need for a strategic pivot. “Despite tariff pressures, BMW Group’s business model remains intact—thanks to our strong global competitiveness, premium vehicles in high demand, and high resilience,” Mertl noted.
BMW’s performance was partly buoyed by a surge in sales of Mini vehicles, which benefited from newly launched models. However, sales of the core BMW brand saw a slight decline during the same period.
Cost Management and Workforce Stability
The company has also implemented cost-saving measures, with a slight reduction in development spending and a 20% cut in overall investments. Nevertheless, BMW continues to repurchase its own shares to support its stock price. Unlike some competitors, BMW has no plans to reduce headcount, aiming instead to maintain a stable workforce throughout 2025.
Outlook for the Full Year
Zipse said BMW expects full-year earnings to match last year’s levels, despite already facing a 37% decline in profits in 2024. The company forecasts an operating margin between 5% and 7% for its core automotive segment—falling short of the long-term strategic goal of 8% to 10%. In the first half of 2025, BMW achieved a margin of 6.2%.
Tariffs and Currency Fluctuations Take a Toll
For the first half of the year, BMW reported after-tax earnings of €4 billion—a 29% drop compared to the same period last year. Revenue stood at €67.7 billion, down 8%. The company pointed to rising tariffs, a sluggish Chinese market, and a weak U.S. dollar as key factors behind the downturn.
Nevertheless, Zipse maintained a positive outlook, calling the half-year results further proof of BMW’s resilience. Compared to other German automakers, BMW is holding up better: Volkswagen, including its Audi brand, saw profits fall by more than one-third, while Mercedes-Benz suffered an even steeper decline of over 50%.
BMW’s Relative Stability in Sales
Early July figures already hinted at BMW weathering the storm more effectively than its peers. BMW’s global deliveries remained nearly flat at around 1.2 million vehicles—unlike Mercedes-Benz and Audi, which saw sharper declines.
Tariffs on Electric Minis from China Weigh Heavily
Tariffs continue to be a major concern. BMW faces not only U.S. import duties but also a hefty 31% tariff on electric Mini imports from China into the European Union. According to the company, these tariffs could reduce its automotive segment’s operating margin by 1.25 percentage points this year—a loss that could amount to billions.
