BMW said its full-year earnings will come in at the upper range of its guidance, but warned a no-deal Brexit would cost hundreds of millions of euros.
BMW expects its automotive profit margin will be between 2 percent and 3 percent, the high end of the range it forecast for the year, CFO Nicolas Peter said Wednesday.
Free cash flow will be clearly above the 1.5 billion euros ($1.8 billion) guided previously, he said.
While there is optimism on earnings, the executive said he is concerned about trade talks between the European Union and the U.K. The tariffs on autos that would follow a hard Brexit would cost BMW a “mid-three-digit” million-euro amount per year, Peter said.
BMW would try to offset the losses by raising prices on cars imported to the U.K. and any Oxford, England-made Mini vehicles sold on the continent.
“It’s a lot of money and we’ll have to react,” Peter told reporters during an online roundtable discussion. He said the measures would not fully compensate for the damages.
Brexit talks are hanging in the balance two weeks before the U.K. will drop out of existing trading arrangements with the EU. Leaders on both sides have said they will continue with talks, but have warned that an agreement might not be reached.