BMW AG

This report does not constitute a rating action. Overview Key strengths Key risks A global premium automotive manufacturer with a market share of about 18% (2025 year to date) in the premium segment, for its highly recognized brand BMW, and geographically well-diversified sales. Large exposure to China (just under than 30% of cars sold in 2024), a region where the group will likely face increasingly tougher competitive market conditions, in our view. Flexible powertrain strategy, and timely transition to the new Neue Klasse architecture supporting BEVs hybrid and gasoline powertrains. Some scale-linked mismatch between production and sales and global vs local sourcing exposing the group to tariffs for import of finished vehicles and parts into the U.S. from Europe and

...BMW AG's sales in China have been declining for the last three quarters. With little less than 30% of total units sold in 2024, China remains a key market for BMW. In our revised global auto sector forecast, we anticipate slightly declining sales in the region, in addition to ongoing pricing pressure over 2025 and 2026 because of intense competition in the battery electric vehicle (BEV) segment and declining appeal of internal combustion engine (ICE)-powered vehicles. Unlike in Europe and the U.S., we think BMW's premium positioning in China is less effective in protecting it against aggressive price competition because China-based original equipment manufacturers (OEMs) are gaining market share in the domestic premium space. BMW remains highly committed to China where it aims to defend its 3% market share. To counter the offensive of domestic competitors, BMW is fostering a local-for-local approach, consisting in strengthening local footprint for development and purchasing, and increasing...

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