Munich-based automaker BMW is bracing for persistent headwinds fueled by tariffs and a weakening used-car market. Added to this is the sluggish Chinese market: returns there are expected to be lower, particularly in the first half of the year, as price and product measures designed to stabilize transaction prices take effect, BMW explained during the release of its annual financial results on Thursday. Overall, the Munich company forecasts a moderate decline in pre-tax profit for the current year.

The automotive profit margin, a key metric for BMW, is expected to land between four and six percent. A primary driver for this is the impact of tariffs, which have plagued global automakers since U.S. President Donald Trump took office. This factor alone is expected to shave 1.25 percentage points off the profit margin, the company stated. In 2025, BMW achieved a mark of 5.3 percent in this segment. Long-term, the company traditionally targets a margin of eight to ten percent.

BMW's revenue shrank by 6.3 percent in 2025 to 133.45 billion euros. The company attributed this to fierce competition in the automotive business, particularly in China. Premium vehicle manufacturers there are suffering from a persistent real estate crisis, which has dampened the appetite of wealthy Chinese consumers for new car purchases. Furthermore, BMW is being outpaced in the electric vehicle sector by rapidly growing Chinese competitors.

The Group's pre-tax profit fell by 6.7 percent in 2025 to 10.2 billion euros, while net profit dropped by three percent to 7.45 billion euros. Nevertheless, BMW increased its dividend by ten cents to 4.40 euros per common share and 4.42 euros per preferred share.

The decline in profit at BMW was significantly less severe than that of its competitors: at Volkswagen and Mercedes, profits had plummeted by approximately half in each case.

(Report by Christina Amann, edited by Sabine Wollrab. For inquiries, please contact our editorial office at Berlin.Newsroom@thomsonreuters.com (for politics and economy) or Frankfurt.Newsroom@thomsonreuters.com (for companies and markets)