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The chief financial officer of German auto giant BMW has said that tension between China and the United States needs to improve in coming weeks or his company’s profit margins will suffer.
The U.S. has threatened a series of global tariffs which would have a negative effect on European carmakers. One concern for BMW is the U.S. threat to raise import tariffs on foreign cars, although Trump has delayed any decision on that until around late November.
Nicolas Peter told CNBC’s Annette Weisbach at the Frankfurt Motor Show on Monday that his firm was “best prepared” to cope with trade tariffs but further measures threatened by Washington would have an impact.
“If this tension betwen US and China would further escalate this would have an negative impact on our P+L (profit and loss) but we still have a couple of months time and I definitely hope the politicians would come to a sensible solution,” he said.
Data on Monday revealed that BMW Group’s global deliveries rose 4.4% in August when compared to the same month last year. The company’s total sales across 2019 to the end of August totals at 1,617,512 units — a 1.3% rise on 2018’s comparable time scale.
Electric drive from BMW
By the end of 2020, the BMW Group want “ten new or revised electrified vehicles on the market.”
The firm aims to have 25 electrified models on the road or in development by 2023. It says more than half of these will be fully electric. Peter said Monday that BMW already had “probably the most complete” range of electric cars.”
The CFO warned that the additional cost of producing electric vehicles was one major reason for its cost cutting program which aims to reduce outlay by 12 billion euros of fixed costs in coming years.
“This technology comes with and add-on cost for sure and this is the main challenge we are facing in our industry,” he said.