Car industry BMW profits fall significantly for the second year in a row
The German car manufacturer BMW has suffered a slump in profits for the past financial year 2024. The Group earned 7.7 billion euros after taxes. This is 37 percent less than in the previous year and already the second sharp decline.
14.03.2025, 08:00
SDA
Turnover also suffered a significant setback. 142 billion euros is a drop of 8.4 percent. Nevertheless, BMW expects demand to increase in the current year. In addition to weakening sales in China, the Munich-based company also suffered from problems with brakes purchased from the supplier Continental.
Despite the "challenging" situation and the tariff increases recently imposed by the USA, pre-tax earnings are expected to return to around the 2024 level. BMW is not providing a forecast for profit after tax.
Margins have fallen since corona
BMW is not alone with its slump in profits. The two other major German car manufacturers, Volkswagen and Mercedes-Benz, have also reported similar falls. At VW, profits fell by 31 percent to 12.4 billion euros, at Mercedes by 28 percent to 10.4 billion euros. They are also complaining about the difficult environment in China, among other things.
However, the current results should not just be compared with the last few years, says industry expert Frank Schwope, who teaches automotive economics at the Fachhochschule des Mittelstands in Cologne and Hanover. At the moment, we are seeing a normalization after an exceptional situation with unprecedented profits.
"After the first coronavirus slump in 2020, there were hardly any discounts and a shift towards more expensive models in the following years - particularly due to the chip and vehicle shortage," explains Schwope. "This resulted in exorbitantly high margins for manufacturers such as VW, Mercedes and BMW, which are normally impossible to achieve."
This can also be seen in the BMW figures: The previous record profit of 18.6 billion euros dates back to 2022. In 2021 and 2023, it was more than 12 billion in each year. Compared to this, the current result looks paltry. But before these three special years changed the benchmark, the old record profit from 2017 was 8.7 billion. Even if inflation is taken into account, the current result of 7.7 billion no longer looks quite so bad in comparison.
