BMW sees smoother road ahead in China after sales skid in 2025 - SCMP

BMW Group revised its 2025 financial outlook following weaker-than-expected sales performance in China, reduced bank commissions, and delayed tariff reductions. The automaker reported that year-to-date volume growth in Europe and the Americas remained positive, but Chinese market growth fell short of targets, prompting a downward adjustment of fourth-quarter volume expectations for the region. Reduced commissions from Chinese banks for financial and insurance services further pressured dealer profitability, necessitating additional financial support.

The company also noted that anticipated tariff reductions between the European Union and the United States—aimed at lowering vehicle import duties from 10% to 0%— had not yet materialized as expected, impacting short-term revenue forecasts. While BMW reaffirmed its long-term EBIT margin target of 5% to 7% for 2025, it narrowed the range to 5% to 6% due to these headwinds. Return on capital employed in the Automotive segment was revised downward to 8% to 10%, down from a prior forecast of 9% to 13%.

Free cash flow in the Automotive segment for 2025 is now projected to exceed €2.5 billion, significantly below the earlier €5 billion estimate, with the delay of customs duty reimbursements from U.S. and German authorities—expected to total a high three-digit million figure—pushed to 2026. Despite these adjustments, BMW maintained its dividend payout ratio guidance of 30% to 40% of net income attributable to shareholders. The company emphasized ongoing strategic flexibility to navigate evolving market conditions while balancing profitability and long-term growth objectives.