BMW has lowered its 2025 earnings forecast, citing slower-than-anticipated growth in China and the effects of U.S. import tariffs. While the German automaker saw year-to-date volume increases in Europe and the Americas through September, it noted that deliveries in China have fallen short of internal projections.
The company now anticipates a slight drop in group pre-tax earnings compared to 2024, with the automotive division’s return on capital projected to decrease to between 8% and 10%, down from the earlier range of 9% to 13%.
The free cash flow forecast for the automotive division has been revised downward, from over €5 billion to just above €2.5 billion. The adjustment comes just days after the company reported a rise in U.S. sales.
Despite current challenges, BMW will maintain its dividend payout ratio of 30–40% of net income and continue share buybacks. However, profitability in its core automotive unit is under pressure from rising costs and pricing challenges.
The company now expects an EBIT margin of 5–6%, the lower end of earlier projections. Strong performance in the U.S. and Europe, aided by promotions like 2026 X3 lease offers, is helping sustain showroom traffic in the final quarter.
BMW shares dropped roughly 3% following the announcement, as investors responded to the downgraded outlook. Analysts noted that while sluggish Chinese sales were anticipated, the magnitude of the free cash flow reduction surprised the market.
BMW attributed the downgrade largely to delays in receiving customs refunds worth hundreds of millions of euros from both U.S. and German authorities. These payments are now anticipated in 2026, impacting short-term liquidity.
The automaker is also dealing with increased expenses due to U.S. tariffs on European vehicle imports.
GENERAL | Toyota is Recalling Nearly 394,000 Trucks Over Rearview Camera Defect
