German car maker BMW has posted disappointing results for 2024 on weakening sales in China and at home.
On March 14, the company revealed revenues dropped by 8.4 per cent to €142 billion and profits declined by 37 per cent to €7.7 billion.
This marked the second year in a row of declining profits. In 2023, despite a record turnover they had already fallen by more than a third to €12 billion.
In China, BMW – Germany’s second-biggest car maker by global revenue – said sales dropped by more than 13 per cent to 715,000 units.
In Germany, BMW also sold fewer cars, 267,000 units, a decline of 5 per cent.
Sales in Europe as a whole as well as in the US, though, increased albeit marginally.
On the positive side, sales of BMW M vehicles increased for the 13th consecutive year as Oliver Zipse, chairman of the car maker’s board, told investors at the presentation of the results. The sporty, high-powered M models have a high profit margin for the producer.
Another factor weighing on group performance were problems with some components, specifically the Integrated Brake System (IBS). In September 2024, BMW announced it was recalling 1.5 million vehicles due to problems with the brakes – causing a sell-off of the company’s stock, which dropped 8 per cent on the news.
On March 14, after publication of the results, BMW shares temporarily dropped by 4 per cent but recovered some ground later in the trading session. In the past 12 months, the shares have lost almost a quarter of their value, down from €105 to €80 per share.
BMW said it expected demand for its cars and motorbikes to pick up in 2025.
Zipse added, though, the escalating trade conflicts between the US, Europe and China could end up costing the company €1 billion this year alone.
“We do not think that all these tariffs will last very long, though some of them might last longer,” he said.
US President Donald Trump recently announced plans for tariffs on vehicles imported to the US and BMW has a large plant in San Luis Potosi in Mexico for exports to the US, which has already been affected by the tariffs newly enforced on some US imports from Mexico.
The company has been left similarly exposed to European Union tariffs on vehicles imported from China where it produces cars for its Mini brand.
Zipse said there were no winners in the tariff game: “If you overdo it with tariffs, it sends a negative spiral to all market participants.”
BMW was not the only German car maker that has struggled. On March 11, Germany’s leading vehicle manufacturer Volkswagen posted a 30 per cent drop in profits for 2024.
