BMW AG has issued a profit warning for the 2025 financial year and has reduced its profit forecast after weaker than expected performance in China and delays in the tariff reimbursement between the European Union and the United States. The car manufacturer announced the revised outlook on Tuesday, shortly after the markets were closed, and signaled that the profit before taxes is now somewhat below the level of last year.
BMW lowers the EBIT Margin and Roce goals
The company based in Munich said that winning the automotive segment before interest and taxes (EBIT) is now expected to be between 5% and 6%, compared to the previously managed range from 5% to 7%. The capital return (ROCE) for the automotive department was also reduced from 9 to 13% to 8–10%.
BMW attributed the revision mainly to ongoing market challenges in China, the largest internal market. While sales in China stabilized in the third quarter and corresponded to the level of the previous year, the company could not achieve the targeted increase in the volume. BMW now expects lower sales volume in China in the fourth quarter of 2025.
“The effects of a significant reduction in commissions by local Chinese banks in connection with the imparting of financial and insurance products compared to end customers requires financial support to strengthen the profitability of the dealers,” said the company in a statement.
Tariff reimbursement delays the further pressure of the cash flow
In addition to the headwind, BMW found that his assumption of a reduction in tariffs between the European Union and the United States has not yet been realized. The car manufacturer had expected tariffs for imported vehicles and auto parts from August 1, 2025 retrospectively from 10% to 0%.
As a result, the Free Cashflow in the automotive segment is expected to fall strong – from more than € 5 billion to just over € 2.5 billion. “In contrast to the assumptions taken so far, the BMW Group now assumes that reimbursements of customs tasks worth a total of a high three-digit million number will not be received in 2025,” said the company.
Regional performance and view
Despite the challenges in China, BMW recorded volume growth in both the European and American regions that until today. However, the car manufacturer’s global profit view was adjusted to reflect a more conservative attitude in the course of the last quarter.
The company emphasized that it continues to commit the shareholders and a dividend distribution rate of 30% to 40% of the net result was maintained and the shareholder continued and its ongoing share buyback program continued.
BMW will give more detailed numbers and comments on November 5, 2025 when it publishes its quarterly explanation of Q3 2025.
While the company continues to expect tariff aid and gradually stabilization of the Chinese market in the long term, the latest forecast, such as global trade uncertainty and local financial dynamics in China, underlines heavily on one of the strongest top performers in the automotive industry.
