Potential import tariffs under the new president may benefit the carmaker, CEO Oliver Zipse says
06 November 2024 - 17:02
by Agency Staff
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Fears over import tariffs, which Trump has threatened on goods from the EU, caused shares in BMW and other German carmakers to decline on Wednesday.
Picture: REUTERS
Potential import tariffs under the US 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, meanwhile, 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 US 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 believes if the US 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.
BMW CEO Oliver Zipse. Picture: BENOIT TESSIER/REUTERS
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 US”.
“In this respect, we shouldn’t be too nervous about what might happen,” Zipse said, adding BMW was present at 30 locations across 12 US states.
Two-thirds of BMW’s vehicle sales in the US were produced in Spartanburg, he said, adding 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 US 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.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
NEWS
BMW upbeat over Trump win as EU car stocks plunge
Potential import tariffs under the new president may benefit the carmaker, CEO Oliver Zipse says
Potential import tariffs under the US 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, meanwhile, 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 US 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 believes if the US 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 US”.
“In this respect, we shouldn’t be too nervous about what might happen,” Zipse said, adding BMW was present at 30 locations across 12 US states.
Two-thirds of BMW’s vehicle sales in the US were produced in Spartanburg, he said, adding 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 US 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.
Reuters
Lower inflation and fuel prices boost October’s car sales
EU imposes big tariffs on Chinese electric vehicles
VW faces strikes over plant closures as profits plunge
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Related Articles
ROCHELLE MAPHOTO: Trump’s comeback heralds harder US approach to Africa
Dollar surges as markets scent Trump win
China tells carmakers to halt investment in EU countries backing EV tariffs
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.