Frankfurt, Germany

Shares in BMW and other European carmakers fell dramatically on Wednesday to new multi-year lows, with investors spooked over escalating concerns that U.S. import tariffs could be imposed. The crisis came after President Donald Trump threatened more auto tariffs, which worried some that higher tariffs could cripple the automotive sector.

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Shares of BMW tumbled to their lowest in four years, while those of Volkswagen, Mercedes-Benz and Porsche also dived more than 7.7%. The market turmoil was driven mostly by concerns about the effect of trade policies, not so much because of disappointing third-quarter results. Porsche, which does not have U.S. production facilities, saw its stock fall to the low point since its IPO in September 2022.

In response, BMW's CEO Oliver Zipse sought to offer investors some reassurance, noting that the company still has a formidable production footprint in the U.S. with the Spartanburg, South Carolina plant, BMW's largest factory globally and one which produces more than 1,500 vehicles a day. The facility, which serves China, Germany and the U.K, mitigates some of the tariff risks associated with the import of products.

“I want to assure our U.S. customers and our American partners that we are responding at BMW and in active dialogue with supply companies, with a strengthened focus on closely monitoring the entire supply chain,” Zipse said, referring to the US, which is our largest export market and where we have a very strong local presence, operating in 30 locations across 12 U.S. states. Two thirds of BMW's U.S. sales are coming from vehicles born locally in Spartanburg, and he pointed out that the company has a strategic advantage in the face of potential tariffs.

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BMW and its rivals would be hit hard if the U.S. increased tariffs by 7.5 to 17.5 percent, Goldman Sachs said, but the automaker’s assembly plants in the U.S. provide some protection.

BMW’s U.S. deliveries dropped 2.1% through the first nine months of 2024, while the Spartanburg plant churned out nearly 411,000 vehicles in 2023 and exported more than half of those. This strong export presence, combined with local production, gives BMW some "natural cover" against the potential trade disruptions, Zipse said.