BMW Reports Lower 2025 Profits Amid China Sales Decline and Tariffs

Munich-based automaker BMW reported a net profit of €7.451 billion for 2025, a 3% decrease compared to the previous year. This downturn is largely attributed to falling turnover from automobile sales, particularly in the face of intensifying competition in the Chinese market and the impact of trade tariffs [1].

Financial Performance Overview

BMW’s total turnover for 2025 decreased by 6.3% to €133.453 billion. Automobile sales experienced a 5.9% decline, while motorcycle sales fell by 2.4%. However, financial services saw a 3.2% increase [1].

Operating profit (EBIT) dropped by 11.5% to €10.186 billion, with the automotive business experiencing a more significant contraction of 20.7%. The operating margin in the automotive segment decreased to 5.3% in 2025, down from 6.3% in 2024 [1]. This decline was influenced by depreciations and tariffs on imports to the United States and the European Union.

China Market Challenges

Sales in China, a crucial market for BMW, fell by 12.5% in 2025 [1]. This decline reflects increasing competition from domestic Chinese brands, which are gaining market share across all price points [1], [2]. The shift in consumer preference towards local brands is impacting established European luxury automakers like BMW, Mercedes-Benz, and Audi.

Mitigating Factors and Future Outlook

BMW has partially mitigated the impact of tariffs in the U.S. Through its manufacturing facility in North America, which produced approximately 413,000 vehicles in 2025, with over half remaining in the U.S. Market [1].

Despite the challenging environment, BMW CEO Oliver Zipse has affirmed the company’s commitment to its current strategy [1]. Looking ahead to 2026, BMW anticipates a slight decrease in pre-tax profit due to ongoing tariffs, unfavorable exchange rates, and rising raw material costs [1].

Shareholder Returns

BMW intends to propose a dividend of €4.40 per ordinary share (up from €4.30 in 2024) and €4.42 per preferred share (up from €4.32 in 2024) to shareholders. The company plans to repurchase up to 10% of its capital, allocating up to €2 billion for share buybacks by April 30, 2027 [1].