BMW braces for another year of tariff and China struggles

By Rachel More and Christina Amann

BERLIN, March 12 (Reuters) - BMW BMWG.DE expects group pre-tax earnings to decline moderately this year and deliveries to stagnate, hit by trade barriers and cutthroat competition in China, the company said on Thursday.

CEO Oliver Zipse said the German premium carmaker was holding ground with its strategy to overhaul its model lineup and cut costs, but warned of uncertainty ahead.

"Our world remains unstable, and numerous risks will persist in the current financial year," he said after the company reported a 6.7% slump in pre-tax profit last year.

Pressure from higher tariffs - both U.S. import tariffs and an EU levy on Chinese-made electric cars hitting the group's Mini - is expected to impact BMW's earnings before interest and taxes (EBIT) margin in the automotive segment by about 1.25 percentage points in 2026, when it is forecast to land in a range of 4 to 6%.

This follows 5.3% in 2025 and 6.3% in 2024.

If tariffs hadn't pushed its margins down in 2025, the company would have reported an earnings rise that year, according to CFO Walter Mertl.

Group earnings before tax fell to 10.2 billion euros ($11.78 billion) in 2025 and are forecast to fall further in 2026, by between 5% and 9.9%.

Deliveries are to stay on a par with 2025, a year that already saw a sharp sales decline in key market China.

After a 12.5% slump in sales there last year, Mertl said, "China could reach last year's level" in 2026, warning of continued challenges in the world's largest car market, where its rivals Volkswagen VOWG_p.DE and Mercedes MBGn.DE have also lost ground.

($1 = 0.8659 euros)