BMW is bracing for lower-than-expected earnings, projecting its fourth-quarter pre-tax profit to fall sharply compared to last year. The automaker now expects its full-year profit margin to land in the lower half of its 6-7% target, citing inflation and increased fixed costs from inventory adjustments.
In a January 28 investor call—closed to the media—BMW signaled that high raw material costs, new model launches, and sluggish demand in China would keep it from reaching its previous 8-10% profitability goal this year, according to a Bernstein note shared with clients. This aligns with current market expectations.
The company is also nearing a resolution to a global brake issue that affected 1.5 million vehicles and dented its annual earnings. However, BMW reassured investors that the problem won’t impact 2025 results.
Meanwhile, CEO Oliver Zipse announced plans to push for an EU tariff reduction on U.S. car imports, arguing that the current 10% rate should be lowered to 2.5%, matching U.S. import duties. Additionally, BMW has joined Chinese automakers in challenging EU tariffs on China-made electric vehicles at the European Court of Justice.
The automaker had already cut its annual outlook last September from 8-10% to 6-7%, after third-quarter profits plunged 61%, missing analyst forecasts due to slowing sales in China and the widespread brake issue.
BMW’s outlook mirrors broader struggles in the European auto industry, where manufacturers face mounting pressure from weak demand, regulatory challenges, and supply chain disruptions.
