BMW Shares Fall 3% After Forecast Cut on Tariff and China Worries
BMW shares were down about 3% in pre-market trading on Wednesday, after the German automaker cut its 2025 earnings forecast. The downgrade came amid revised U.S. tariff assumptions and slower-than-expected growth in the Chinese market.
The company now expects a profit margin of 5–6% in its automotive division, compared to its previous forecast of 5–7%. BMW also projected a slight decline in pre-tax earnings for the year.
Citing delays in U.S. customs refunds, the company halved its outlook for free cash flow in the automotive segment to above €2.5 billion ($2.9 billion). Despite this, BMW continues to assume that the European Union will retroactively reduce tariffs to zero, which could bring in a three-digit million-euro reimbursement next year.
China Market Weakness Weighs on BMW
BMW, like other European carmakers, is facing intense competition in China, as local brands expand aggressively amid a real estate slowdown. The company reported strong sales in Europe and North America through September but said that growth in China fell short of expectations.
Analysts at JPMorgan noted that beyond tariff effects, BMW’s ability to maintain sales volume and pricing strength in China by 2026 will be crucial for its long-term competitiveness.
Industry-Wide Challenges
BMW’s domestic rival Mercedes-Benz also reported weaker results this week. Its sales dropped due to higher U.S. import duties and mounting competition in China, pushing its shares down 2.7% in early Frankfurt trading on Wednesday.
($1 = €0.8610)
