We expect limited volume growth in BMW's main markets, including China, in the coming years. While the premium segment in which the group operates should continue to show stronger growth prospects than other segments, we believe BMW is likely to face stronger competition from peers in China including Daimler and Tesla--the latter being ready to produce its best-selling models in China--and other local manufacturers like NIO and Xiaopeng Motors. All this will challenge BMW's position in one of its most important markets. Because electrified vehicles yield lower margins than equivalent combustion models, we anticipate continued margin pressure for BMW in 2020 and 2021. We also see BMW as relatively vulnerable to the risk of escalating trade conflict between the U.S.
