BMW expects lower 2026 profit amid trade and China risks
BMW expects pre-tax earnings to fall this year as trade tariffs and China competition weigh on margins. Deliveries are forecast to stagnate throughout 2026.
The prominent automaker Bayerische Motoren Werke AG has announced a cautious outlook for the current fiscal year, projecting a moderate decline in group pre-tax earnings and a stagnation in deliveries. The company, based in Germany, is navigating significant headwinds including trade barriers and intense competition in China.
CEO Oliver Zipse noted that while the manufacturer is maintaining its strategy to overhaul its model lineup, the global environment remains volatile. Zipse provided this assessment after the company reported a 6.7% slump in pre-tax profit for the previous year.
Our world remains unstable, and numerous risks will persist in the current financial year.
Trade tensions are expected to impact the bottom line significantly. Import tariffs in the United States and a European Union levy on Chinese-manufactured electric vehicles are forecast to reduce the automotive segment's earnings before interest and taxes (EBIT) margin by 1.25 percentage points by 2026. The margin is expected to land between 4% and 6%, down from 5.3% in 2025.
CFO Walter Mertl indicated that group pre-tax earnings, which reached 10.2 billion euros ($11.78 billion) in 2025, are likely to fall by another 5% to 9.9% in 2026. He warned that sales in the Chinese market, which saw a 12.5% decline last year, may only stabilize at those levels in the coming year. The challenges in the region are widespread, affecting other major players such as Volkswagen AG and Mercedes-Benz Group AG, both of which have seen their market positions challenged by local competition and shifting economic conditions.