By Christoph Steitz
FRANKFURT (Reuters) -Potential import tariffs under the U.S. presidency of Donald Trump may benefit BMW, its CEO said on Wednesday, even as shares in the German premium carmaker and its rivals fell due to concerns the sector would be hurt by escalating trade disputes.
Fears over import tariffs, which Trump has threatened on goods from the EU, caused shares in BMW, Volkswagen, Mercedes-Benz and Porsche to fall 4.6-6.4%, among the biggest decliners across Europe.
BMW CEO Oliver Zipse, meantime, sought to allay fears after presenting bleak third-quarter results, pointing to the company’s strong local footprint that includes its largest plant worldwide.
The U.S. market accounted for 12.9% of the 3.1 million in German passenger car exports in 2023, making it the single-biggest export market for carmakers in Europe’s biggest economy.
Goldman Sachs reckons that if the U.S. were to increase tariffs by 7.5-17.5%, “we see the largest headwind to EBIT at Volvo Cars, followed by Mercedes, Porsche, BMW and VW”.
BMW’s plant in Spartanburg, South Carolina, produces more than 1,500 vehicles a day, making it the company’s biggest factory worldwide and a main exporter to markets including Germany, China and Britain.
Zipse, speaking to journalists after presenting third-quarter results, said BMW may even have “more of an advantage” if there were tariffs “because we have a very, very large footprint in the USA”.
“In this respect, we shouldn’t be too nervous about what might happen,” Zipse said, adding BMW was present at 30 locations across 12 U.S. states.
He said that two-thirds of BMW’s vehicle sales in the U.S. were produced in Spartanburg, and that BMW was committed to investing further in the site with its more than 11,000 employees.
In the first nine months of 2024, BMW’s deliveries in the United States were down 2.1% at 271,399 vehicles.
The Spartanburg plant alone produced 410,793 vehicles in 2023, of which more than half were exported to 120 countries, leaving ample room for BMW to sell more locally should tariffs be slapped on vehicle imports.
“There’s some natural cover-up against possible tariffs,” Zipse said.
(Reporting by Christoph Steitz; Additional reporting by Dominique Patton; Editing by Rachel More, Miranda Murray and Bernadette Baum)
