BMW shares shudder after it cuts profit forecast

Berlin — BMW shares fell as much as 7% on Wednesday after the luxury carmaker cut its 2025 earnings forecast, citing delays in US and German customs refunds and continued weakness in China as trade tensions cloud its prospects.

The German company said late on Tuesday that it now expected pretax earnings to decline slightly this year from 2024, against previous guidance for a flat outcome.

“The tariff news is disappointing, especially given our expectation that BMW could be well positioned on tariffs versus peers,” said RBC analysts about the carmaker whose biggest plant is in the US. It is Germany’s top automotive exporter by value.

Tariff reduction

Citing delays to refunds from customs, BMW halved expectations for free cash flow from its automotive business to above €2.5bn, and narrowed its profit margin forecast for that business to 5%-6% from 5%-7%.

The vehicle maker, which exports a range of SUV models to Europe from its US plant, still assumes that the EU will retroactively implement a tariff reduction to zero from current import duties of 10% following an EU-US framework trade deal.

However, it expects hundreds of millions in customs reimbursements from the US and Germany only next year.

UBS and JPMorgan said the timing of the tariff refund was not a big issue, and the focus should be more on the Chinese-related reasons for the guidance cut.

“More important than the impact of tariffs will be the firm’s ability to stabilise the volume momentum and pricing power in China in [full-year 2026], which will ultimately ensure the longer-term competitiveness of the group,” JPMorgan analysts wrote.

BMW said on Tuesday that while sales had risen in Europe and the US in January-September, sales in China were below expectations.

Shares in German rival Mercedes-Benz, which also reported declining sales due to tariffs and weakness in China on Tuesday, were down 3.5%.

BMW will publish its full quarterly results on November 5.

Reuters