BMW's China problem isn't going away — and Trump's trade war may make things worse
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- BMW is getting crushed in China as rivals like BYD squeeze out foreign carmakers.
- The German giant is fighting to turn things around, but now has a brewing trade war to contend with.
- The CEO said the trade conflict sparked by President Donald Trump could cost BMW up to $1 billion this year.
BMW is still getting crushed in China — and now has a brewing trade war to worry about too.
The German carmaker reported on Friday that net profits had collapsed by more than a third last year, and warned that 2025 is likely to be challenging thanks to the ongoing tariff face-off between the US, China, and Europe.
BMW stock fell as much as 4.5% on Friday. As with many of its European rivals, the main source of the automaker's woes is China.
Despite BMW Group's sales rising slightly in the US and Europe, they collapsed 13.4% in the world's largest car market last year.
BMW has found itself increasingly squeezed by China's insurgent local EV makers, who are taking market share from their foreign competitors with their high-tech, affordable electric vehicles.
Fellow German carmakers VW and Porsche have also reported double-digit sales drops in China, even as the likes of BYD and Xiaomi enjoy a sales surge.
BMW plans to roll out a new lineup of next-generation EVs, dubbed the "Neue Klasse," starting later this year in an attempt to boost sales.
It faces the additional headwinds of a brewing global trade war sparked by America's on-again-off-again tariffs on Canada and Mexico.
BMW CEO Oliver Zipse told Bloomberg the automaker expects trade conflicts between the US, China, and Europe to cost it about 1 billion euros ($1.1 billion) this year.
However, he expects much of the disruption to be short-lived. "We don't think that all these tariffs will last very long, though some of them might last longer," Zipse said.
Other European automakers are also sounding the alarm about President Donald Trump's tariff barrage. The boss of VW brand Skoda warned on Friday that US tariffs would raise costs, and could push Chinese carmakers to accelerate their expansion into Europe.
BMW did not immediately respond to a request for comment.