BMW: Expect Lower Profits

Tariffs & EU emissions the cause

Ken Pauli
September 29, 2018 - 4:00 am
BMW cars at port

BMW

BMW says they are expecting both revenue and profits for 2018 to be less than expected, revisiting their expected 8 to 10% profit this year down to 7%.  Company officials sited two factors: the escalating global trade war and increased emissions standards in Europe.

The German automaker's biggest plant in the world is located in Greer.  It is also the largest exporter of vehicles in the United States, exporting about 70% of the 400,000 vehicles it makes each year at the plant.  

A company spokesman says BMW has always believed in free trade, but if threatened tariffs take effect, it could undermine the competitiveness of BMW production and sales. That would reduce exports and be negative on both investment and jobs here in the Upstate.

Spartanburg County Councilman David Britt testified this week in Washington at a Senate Finance Committee hearing, specifically about how tariffs will hurt companies like BMW. 

Last month, BMW reported second quarter earnings off by over 14% from the same quarter last year, although revenue was slightly up.

The global trade war escalated when President Trump added new tariffs on both steel and aluminum, items which car manufacturers use a lot of.  When additional tariffs on Chinese goods were announced, China retaliated with a 40% tariff on imported vehicles from the U.S., which includes those BMW's made in the Spartanburg County plant.  BMW says they increased the cost of some models exported to China by up to 7%.  The company also announced they will build more vehicles in China, but added that decision has not changed their plans to invest money and jobs into their Upstate facility.

 

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