BMW profit holds up despite Trump tariffs, China woes

Looking ahead, BMW finance chief Walter Mertl said he expected transatlantic tariff wars to ease off and help the firm's result.

Mertl said he expected that this year "an agreement between the USA and Europe will be finalised, allowing us to import at zero percent".

Munich-based BMW has its largest plant in South Carolina and is the United States' largest car exporter. 

This means it would stand to profit from the implementation of an EU-US deal unveiled last July that would see the EU rate on US cars reduced to zero.

Mertl also said he expects "positive agreements between the US, Mexico, Canada and other countries" on trade.

All tariffs had in total cost the company roughly 1.75 billion euros in the past year, BMW said, hitting the margin at its automotive business by 1.5 percentage points on sales of 117.6 billion euros.

The firm pays duties on some imports to the US, including on some car parts, and the European Union levies tariffs on Chinese-made electric cars, hitting BMW's electric Mini.

BMW sees duties hitting its automotive margin by 1.25 percentage points for 2026, down from 1.5 in 2025.

But the company still forecasts an overall moderate drop in earnings before tax, hit by currency effects, raw material costs and the burden of reshaping its business in China amid fierce competition.

BMW shares were down almost 2 percent at market open but later made up the fall to edge into the green.

- China turnaround? -

In common with its German rivals, BMW has come under intense pressure from local competitors in China, the world's largest car market.

BMW's sales by volume in the country are now at their lowest level since 2017 and the carmaker last October lowered its profit outlook, warning of Chinese sales below expectations.

But there was perhaps light at the end of the tunnel, BMW said, forecasting stable sales in the country for the coming year rather than another fall.

"We're aiming for growth in all regions," BMW sales chief Jochen Goller said. "We want to grow in Europe and we want to grow in China in the coming years."

BMW has taken a more flexible approach to electric vehicles (EVs) than some of its competitors, deciding early on to maintain petrol and diesel options for its customers.

Whereas firms from Porsche to Ford and Jeep- and Fiat-owner Stellantis have booked very costly hits measured in the billions following partial pivots away from EVs, BMW has so far avoided this at the same time as seeing its electric sales rise.

The European Union has recently eased a planned 2035 ban on the sale of new combustion engine cars, and emissions now need to fall by 90 rather than 100 percent by 2035. 

BMW CEO Oliver Zipse told an analyst call that the rules were still too rigid and complex.

"In the small print, it actually works against technology openness," he said, warning it was "dangerous" to force firms into making cars that simply might not sell.

"If that regulation is implemented and that is happening in the market, you will shrink this industry. I think that is a dangerous path to go down."

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