BMW CFO Says He's Still ‘Confident’ in China Despite Tariffs
(Bloomberg) -- BMW can maintain its place in the world’s largest auto market, despite the U.S.-China trade war that spurred the luxury automaker to lower its profit forecast for the first time in a decade.
BMW Chief Financial Officer Nicolas Peter said the escalating trade war between the U.S. and China will cost the automaker almost 300 million euros ($347 million) in the second half of 2018. BMW had to raise prices on cars imported to China, including its X5 utility vehicle, by about 7.5 percent, he said in an interview with Bloomberg Television at the Paris auto show. The automaker is gearing up to export its new X5 to China from its plant in Spartanburg, South Carolina, in a couple of months, he said.
“We are confident thanks to the great quality of the program, that we’ll be able to maintain our strong position in the Chinese market,” Peter said.
BMW cut its profit forecast last month, becoming the latest automaker to succumb to pressures ranging from trade wars to emissions scrutiny. A number of automakers have warned of lower profits in recent months, blaming U.S.-China trade tensions. The conflict is adding to pressure on an industry grappling with the shift to electric cars and the need to invest in autonomous-driving technology. BMW is among the most-affected from higher tariffs, as it ships popular sport utility models like the X5 from its U.S. plant to China.
The German company is also being hurt by new European Union emissions tests, even though it got ready sooner than rivals Volkswagen AG and Daimler AG. Other companies dumped cars onto the market before the Sept. 1 changeover to tougher rules, leading to widespread discounting.
BMW shares rose 0.6 percent to 78.14 euros in trading Monday in Frankfurt after closing Friday at the lowest price since July 3. The stock has declined 10 percent this year.
©2018 Bloomberg L.P.