BMW posted its worst first-quarter profit since the pandemic, with earnings falling roughly 23–25% year-over-year as tariff headwinds and fierce competition in China weighed on results. The automotive division's operating margin compressed to 5%, a significant step down from prior-year levels. A one-time charge from the UK's Financial Conduct Authority added further pressure, though the core vehicle business still managed to beat expectations and order books remain healthy.
A 5% automotive margin signals that premium European carmakers are losing pricing power in their most critical growth market — China — while simultaneously absorbing tariff costs they cannot fully pass on to buyers. Investors in European auto stocks should note that BMW outperformed Mercedes-Benz and Volkswagen this quarter, suggesting the sector as a whole is under pressure, not just one company. ETFs with heavy European industrial or auto exposure face a sustained drag until the tariff and China competitive dynamics stabilize.
Q2 2025 BMW earnings release (expected late July 2025). Mercedes-Benz and Volkswagen upcoming quarterly results (late April–May 2025). Any updates on US and EU tariff policy affecting auto imports. China auto sales data for April 2025 (released early May 2025).
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