By Micah Jonah, March 12, 2026
German automaker, BMW has warned that 2026 could remain challenging as rising tariffs, declining sales in China continue to weigh on the company’s performance.
The luxury car manufacturer said it expects a moderate decline in pre tax earnings this year while vehicle deliveries are projected to remain largely unchanged from 2025 levels.
The warning comes after BMW reported a 6.7 percent drop in pre tax profits in 2025, reflecting global trade tensions, slowing electric vehicle demand and weaker sales in key markets.
Chief Executive Officer, Oliver Zipse said the global economic environment remains uncertain and could present further risks for the automotive industry.
“Our world remains unstable, numerous risks will persist in the current financial year,” Zipse said while presenting the company’s outlook.
The company said tariffs are expected to reduce its core automotive earnings margin by about 1.25 percentage points in 2026. BMW projects its margin to fall within a range of 4 percent to 6 percent this year.
One of the biggest challenges for the company remains the Chinese market, where deliveries dropped by 12.5 percent in 2025 due to stronger competition from domestic manufacturers and shifting consumer demand.
BMW’s rivals, including Volkswagen Group and Mercedes-Benz Group, have also reported weaker performance recently as the industry faces trade barriers, rising production costs and an uneven transition toward electric vehicles.
Despite the challenges, BMW sees growth opportunities in markets such as the United States and across Europe.
The company is also preparing to launch its new generation of vehicles under the “Neue Klasse” platform, with about 40 new models expected to be introduced over the next two years as part of its long term strategy to strengthen its global market position.
