BMW maintained its ‌2026 financial guidance on Wednesday and signalled it could weather US tariffs and Chinese competition, sending shares up nearly 5 per cent despite first-quarter pretax profit tumbling 25 per cent.

The German premium carmaker beat key profit expectations for the quarter even as a narrowing core margin underscored ​the pressure on BMW at the start of the year.

This convinced investors it was well-positioned for ​a volatile global auto market, and shares rose 4.6 per cent in early trading.

CORE MARGIN BEATS FORECAST

The company ⁠reported first-quarter pretax earnings at 2.3 billion euros ($2.70 billion), exceeding analyst forecast of 2.2 billion euros in a ​company-provided consensus.

Group revenue missed expectations, falling 8.1 per cent to 31 billion euros.

The pressures also squeezed rivals Mercedes-Benz (MBGn.DE) and Audi at ​the start to 2026, as Chinese automakers extended their lead in their home market — the world’s largest — and pushed deeper into Europe, while US tariff threats clouded the outlook further.

Despite the profit slide at BMW, analysts pointed to an above-forecast operating margin ​in the company’s core automotive business.

BMW’s EBIT margin in its core automotive business stood at 5.0 per cent in the ​first quarter, down from 6.9 per cent a year earlier but ahead of analysts’ forecast of 4.7 per cent.

“BMW looks well-prepared to deal with ‌continuing volatility,” ⁠Jeffries analysts said in a note to investors.

COST CUTS ON COURSE

Like many carmakers, BMW is turning to cost reductions to offset pressures from tariffs and high costs for raw materials in a globally weak automotive market.

Unlike Volkswagen and Mercedes, however, it has so far managed to do so without cutting jobs, focusing on factory efficiencies ​and reduced investment, having rolled ​out the Neue Klasse ⁠platform to overhaul its product portfolio.

Tariffs, including US levies but also an EU tariff on EVs made in China affecting BMW’s Mini brand, had a 1.25-percentage-point impact ​on BMW’s car margin in the first quarter.

The company maintained its full-year guidance, forecasting ​a moderate ⁠decline in its group result. BMW’s core operating margin is seen in a range of 4 per cent to 6 per cent after 5.3 per cent in 2025.

The outlook does not incorporate a potential increase in US auto tariffs, which President Donald Trump threatened on ⁠Friday ​to raise to 25 per cent from 15 per cent currently. It also assumes the ​Middle East conflict “will not be enduring,” the company said.

CEO Oliver Zipse downplayed Trump’s announcement as merely a threat to push the EU to ​act on its trade deal with Washington.