BMW expects a $1.1 billion tariff hit, warns of waning Chinese demand

BMW said that its sales in China fell more than 13% in 2024. Shares traded lower early Friday morning before flattening out.

Chinese domestic competition from lower-cost automakers like BYD crunched the German carmaker, which sells more than a quarter of its vehicles in China.

The company doesn’t seem to have much optimism for things turning positive in the world’s largest car market, but did reiterate its 3% market share in the country and affirm that it remains No. 1 in the premium segment there.

Like nearly all other major automakers, BMW isn’t just being squeezed by competition in China. The company said it expects the ongoing tariff tug-of-war led by President Trump to cost it $1.1 billion this year. BMW CEO Oliver Zipse said the company’s tariff price tag outlook is conservative but that the company doesn’t assume all the levies in place today will last the entire year.

Earlier this month, UBS analysts estimated that about a tenth of BMW’s US car sales (by unit) were imported from Mexico. Trump has further tariffs planned on goods imported from the EU early next month.

Shares of US automakers like GM and Ford have been seesawing this year amid tariff announcements, delays, and retaliation.