MUNICH (dpa-AFX) - Carmaker BMW continued to feel the impact of a weak Chinese market last year and has set conservative targets for 2026. Earnings before interest and taxes (EBIT) fell by 11.5 percent to 10.19 billion euros in 2025, the DAX-listed group announced in Munich on Thursday. In the crucial automotive segment, the operating profit margin (EBIT margin) stood at 5.3 percent, a decline of one percentage point. In the fourth quarter, the Bavarian company's performance in this area was slightly weaker than experts had expected.

For the new year, the closely watched automotive operating margin is expected to land in the range of 4 to 6 percent. According to the company, increased tariffs are weighing on this figure by approximately 1.25 percentage points. Experts had previously anticipated a slight recovery in the margin to 5.7 percent in 2026.

The stock was down slightly by 0.9 percent in pre-market trading. So far this year, it has lost 13 percent in Xetra trading, with the conflict in the Middle East recently weighing on investor sentiment. The share price is also slightly down on a one-year basis.

Bottom-line profit for 2025 decreased by 3 percent to 7.45 billion euros, while revenue fell by 6.3 percent to approximately 133.5 billion euros. In a surprising move, the dividend is set to rise by 10 cents to 4.40 euros per DAX-listed ordinary share. The main beneficiaries are the heirs of the Quandt family, Stefan Quandt and his sister Susanne Klatten.

More stable than the competition

BMW has fared relatively well so far through the general crisis in the German automotive industry. Although this marks the third consecutive annual decline in profit, its two German rivals, Mercedes and Volkswagen, saw their profits nearly halved last year. In comparison, the decline at the Munich-based company is almost negligible - though problems in China and issues with supplied brakes had already taken a heavy toll the previous year.

No job cuts so far

And while other German carmakers are cutting jobs, BMW has navigated the crisis so far without any redundancy programs.

A clear advantage for the Munich firm is likely the fact that, thanks to its own large plant in the United States, it is at least partially shielded from U.S. tariffs. Nearly 413,000 cars were built there last year, more than half of which remained in the U.S. This means that BMW had to import less than half of the cars it sold in the United States.

Furthermore, they benefit from having designed their plants so that electric cars, hybrids, and internal combustion engines can be produced on a single assembly line. This helps cushion the uncertainties surrounding the ramp-up of electromobility. BMW CEO Oliver Zipse emphasized: "We have positioned ourselves strategically correctly over the past few years. We are benefiting from that today: we do not have to change course in a challenging environment, but can stay on track and continue to consistently implement our strategy."

Zipse's final figures

The annual financial statement is the last for which Zipse is responsible. On May 14, his designated successor, Milan Nedeljkovic, will take over. He is currently the Board Member for Production, a position Zipse also held before his promotion to the top of the company.

Nedeljkovic has therefore long been involved in Zipse's most important project, which will help determine BMW's fate in the coming years. The "Neue Klasse" (New Class), whose first representative, the iX3, was unveiled last year, has been available at dealerships for a few days.

So far, it has had a strong start. Given the high volume of orders, BMW already introduced an additional production shift in January. The Munich-based company also plans to present the next car of the New Class shortly: the i3 - the electric counterpart to the 3 Series - in a volume segment that is central to the manufacturer.

Cautious forecast

However, BMW remains reserved regarding the outlook for the current year, assuming that pre-tax profit will decline moderately despite stable deliveries. Factors contributing to this include the burden of tariffs, currency effects, and more expensive raw materials./men/ruc