BMW Slashes Profit Forecast Due to Slow China Sales and Tariff Delays
BMW has revised its profit forecast for the current year, citing slower-than-expected sales in China and delays in Trump tariffs. The company anticipates a drop in operating profit and has lowered its expectations for free cash flow.
BMW's sales performance in China during the third quarter was slower than anticipated. Despite a nearly 9% increase in sales compared to the prior-year quarter, which was particularly weak due to brake-related delivery issues, the pace was not sufficient to meet expectations. The company has adjusted its expectations for the fourth quarter in China accordingly.
BMW has reported a 0.4% fall in sales in China. In response, the company expects to provide financial support to its Chinese dealers. However, this support is not the primary reason for the revision in profit forecasts. Instead, the decision is largely driven by weaker sales in China and delays in Trump tariffs refunds, which are now expected in 2026 rather than this year. The high hundreds of millions in Trump tariffs refunds anticipated in 2021 have been postponed to 2026.
BMW's operating profit is now expected to be lower than last year, rather than at the same level. The company has also significantly reduced its forecast for free cash flow. Market conditions, including those involving the EU and the U.S., have played a role in BMW's decision, although no specific companies like Salesforce or Macy's have been mentioned as influencing the change.
BMW's revised profit forecast for the current year reflects slower sales in China and delays in Trump tariffs reductions. The company anticipates a drop in operating profit and a reduction in free cash flow. BMW has adjusted its expectations for the fourth quarter in China and plans to provide financial support to its Chinese dealers. The broader market conditions have also contributed to BMW's decision.
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