BMW AG’s carmaking profits will lag well below its long-term targets this year, weighed down by escalating trade tensions between the US and Europe and muted sales in China.

BMW is facing another difficult year as it grapples with declining sales in China, where local electric-vehicle producers led by BYD are taking over. Picture: Bloomberg

German automaker BMW warned Friday that it would take a big hit from trade wars between the United States, China and Europe this year, on top of weak Chinese demand,

German carmaker BMW said it faced a €1bn hit from global tariffs this year as it reported a slump in annual profits amid weak demand in China.

The German manufacturer expects an automaking margin of between 5% and 7% this year, after the measure fell to 6.3% in 2024, the lowest in four years. BMW’s long-standing aim is to keep its carmaking returns above 8%. BMW shares declined as much as 4.5% on Friday. The stock has fallen more than 20% over the past year.

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