BMW reported that its profit fell by 1/3 in the second quarter. The German premium carmaker has been hit hard by declining sales in the key market of China and US tariffs, AFP reported.

Net profit in the April-June period fell 32 percent from a year earlier to 1.8 billion euros, the company said.

Revenue fell 8 percent to 34 billion euros as sales fell 14 percent in China, where German carmakers face stiff competition from local rivals, especially when it comes to electric vehicles.

U.S. taxes on imports of cars and auto parts, introduced by U.S. President Donald Trump in April as part of his tariff blitz, have also hit revenue, the manufacturer said, without giving an exact figure.

However, BMW said it expects the tariffs to cut profit margins on vehicle sales this year by 1.25 percent.

The company is sticking to its 2025 targets, forecasting profit margins of between 5 and 7 percent for its vehicle sales, similar to the 6.3 percent level reported last year. 

BMW is the latest German auto titan to report weak earnings in recent days, with Volkswagen and Mercedes-Benz also hit by Trump's tariff attack and ongoing problems in China.

Despite the poor results, BMW's CFO Walter Mertl insists that the automaker's "business model remains intact."

"Our U.S. footprint helps us limit the impact of tariffs," Mertl said.

The Munich-based concern has a plant in South Carolina. However, it continues to export about half of its vehicles destined for U.S. customers to the United States, mainly from Europe and Mexico.

Imports of cars into the US have been subject to a 27.5% duty since April, although this will be reduced to 15% from August after Trump and the EU struck a trade deal.

However, this rate is much higher than seen in the past. | BGNES