BMW Profits Plunge on Weak Chinese Demand and Tariffs

BMW reported a significant 37% drop in annual net profit due to sluggish demand in China and growing tariff-related challenges. 

Net profit fell sharply year-over-year, sending the figure down from its previous levels, as annual earnings margins for cars shrank to 6.3% in 2024, with the company forecasting margins between 5% and 7% for 2025. 

BMW shares on the Frankfurt Stock Exchange and also the DAX reacted negatively, trading down roughly 2% following the announcement. The automaker cited substantial headwinds from escalating tariffs, including a 20% tariff on Chinese imports and a 25% tariff on imports from Canada and Mexico, which collectively shaved about one percentage point off its automotive earnings margin. 

BMW CEO Oliver Zipse pointed to subdued demand in China—one of the company’s most important markets—as another major factor in the 37% decline in net profit compared to the previous year. 

Last year's total vehicle deliveries slipped slightly to 2.55 million units from 2.55 million the previous year, primarily due to delivery halts triggered by a braking system fault supplied by Continental. 

What Does This Mean for Me?

Automakers are finding themselves in the eye of the storm of the growing global trade war. Not only are they heavily reliant on aggressively-tariffed inputs like steel and aluminium, but automaker supply chains are also deeply interlinked, and the Trump-induced uncertainty has thrown short-term stability out of the window.

Still, Zipse suggested a cautious optimism, noting that despite current protectionist trends, sentiment could shift toward more open trade policies over the coming year, potentially easing pressures on global automakers like BMW.