BMW stands firm faced with pressure from China and the US

h1On July 31, BMW will unveil its H1 results. Ahead of this, the manufacturer has spoken to analysts about its performance in the first half of the year and the changing business environment. The group is resisting better than its competitors, thanks to the strength of the Mini and the European market.

Executives expressed confidence in the outcome of trade negotiations between the European Union and the United States, optimism that was already factored into their forecasts. Without mentioning any direct contacts with the US administration, BMW pointed to its influence in the states where it manufactures, particularly South Carolina, and its role in discussions on free trade agreements with Mexico.

On the subject of import duties in the US (currently 27.5%), the chairman of the board of directors admitted: "Zero will never be achieved. But we will reach a negligible level."

BMW and Mercedes, the best placed

In this tense trade environment, BMW and Mercedes would fare best, as their strong US production protects them, in part, from tariff increases. Both groups are pushing for a compensation mechanism. Without an agreement, Volvo would see its EBIT cut by 300bp, Porsche by 240bp, and Mercedes and Audi by 160bp, according to Bloomberg.

Deliveries remain stable despite China

BMW delivered 1,207,388 vehicles in H1 under the BMW, Mini, and Rolls-Royce brands. This represents a marginal decline of 0.5% year-on-year. Q2 even saw a slight increase (+0.4%).

In China, the decline was greater, with sales falling 15.5% to 318,000 units. Analysts on the call raised questions about the annual target of zero growth. BMW is sticking to its target and points to a low comparison basis with H2 2024. The group is counting on the launch of the new X3 and an overhaul of its distribution network to turn things around. In the longer term, the group remains confident: even if Chinese brands rise to 70% market share, there would still be potential for 23 million vehicles for foreign manufacturers, according to management, which highlights its high-end positioning, away from the price war.

Highlights of H1

Despite a slight overall decline (-2.3% to 1.07 million units), Mini jumped 17% thanks to the renewal of its range, reaching 133,000 vehicles.

In the US, BMW grew by 2.7% despite tariffs. In Europe, sales soared by 8% to 498,000 vehicles, with the Old Continent remaining its largest market.

Another strong point was electric vehicles. BMW sold 220,500 in H1, an increase of 16%. This is more than double the number sold by Mercedes-Benz and Audi over the same period. UBS believes that the group's electric strategy remains underestimated by the market. It will be detailed at the investor day on July 15 and 16.

BMW, stronger than its rivals

Compared to its direct competitors, BMW is doing better. Audi recorded a 6% drop in sales, Mercedes 8%. Only Volkswagen (including Audi) came out ahead, with a 1.3% increase to 4.4 million vehicles.