German carmaker BMW logged a decline in first quarter profit on Wednesday, citing fierce competition across markets, including China, and the effects of U.S. tariffs.
Net profit for the first three months of the year fell 23.1% to 1.67 billion euros ($1.96 billion), BMW said, while the company's core profit margin fell to 7.6% from 9.2%.
"Fierce competition across major automotive markets, especially in China, impacted pricing and sales volumes," BMW said in a statement.
Like its German rivals Mercedes-Benz and Volkswagen, BMW has come under intense pressure from local competitors in China, the world's largest car market.
BMW Group sales by volume fell 10% in China in the first three months of the year.
Though that outperformed the Chinese market overall, which shrank by 17.5%, BMW's deliveries in the country last year were already at their lowest level since 2017.
U.S. tariffs on cars and car parts, meanwhile, led to "a significantly larger hit than the same quarter in the previous year, in which only EU import tariffs were due on battery-electric vehicles from China," BMW said.
Imports of European cars into the United States are subject to a 15% tariff under a partially implemented European Union-US deal unveiled last July.
U.S. President Donald Trump said last week that he would raise the rate to 25%, charging that the bloc had not upheld its side of the bargain.
BMW also has its largest plant in Spartanburg, South Carolina, meaning it has to pay increased U.S. duties on some car parts.
Total tariffs – including EU duties on Chinese-made electric cars that hit BMW's electric Mini as well as on BMW's U.S. exports – cost BMW roughly 1.75 billion euros last year, the group said in March.
BMW maintained its outlook for the year, expecting a "moderate decline" in earnings before tax for the year, but warned that it was bracing for "a higher level of volatility related to tariffs."
The war in the Middle East – which has raised energy prices, shipping costs and the price of industrial inputs like plastics and aluminium – added to uncertainty, BMW said.
The guidance assumes that the conflict does not endure, BMW said.
