BMW shrugs off 25% profit slide as Neue Klasse and European demand cushion tariff blow

BMW absorbed a near 25 per cent drop in first-quarter pre-tax profit while reaffirming full-year guidance, sending its shares almost 5 per cent higher as the German premium carmaker leaned on record European order intake and the rollout of its Neue Klasse electric platform to offset the bite of US tariffs and a contracting Chinese market.

Group earnings before tax fell to €2.35bn for the three months to March, down from around €3.1bn a year earlier but ahead of the €2.2bn consensus, the Munich-based group said on Wednesday. Revenue slipped to €31bn. The automotive division's EBIT margin came in at exactly 5 per cent, in the middle of BMW's 4 to 6 per cent guidance corridor, despite a 1.25 percentage point hit from US import duties.

Chief financial officer Walter Mertl described the result as sound and confirmed BMW's full-year framework, including the target of more than €4.5bn in automotive free cash flow and the next €625mn buyback tranche due by August. Global deliveries fell 3.5 per cent to 565,780 vehicles, with sales in China down 10 per cent and the broader Americas softening. Battery-electric volumes slid 20 per cent year-on-year as US federal tax credits unwound.

Europe, however, told a sharply different story. Quarterly order intake on the home continent reached an all-time high, with BEV orders up around 62 per cent. The iX3, the first vehicle on the new Neue Klasse architecture, has attracted more than 50,000 European pre-orders since deliveries began in March, prompting BMW to bring forward a second production shift at its Debrecen plant in Hungary.

For investors weighing Volkswagen's deeper 14 per cent profit slide and Mercedes-Benz's volume retreat, BMW's relative resilience offered a rare bright spot in a German auto sector buffeted by tariffs and Chinese competition.