BMW AG

This report does not constitute a rating action. Overview Key strengths Key risks A leading global premium automotive manufacturer with a market share of about 17% (2025), for its highly recognized BMW, Mini, and Rolls-Royce brands. Steep market decline and substantially tougher competition in the premium segment in China (about 23% of BMW's vehicle sales in first-half 2025). Flexible powertrain strategy supporting five different drivetrains, and expected improvements in competitiveness in battery electric vehicles (BEVs) with the new Neue Klasse (NK) architecture. Significant tariff burden from vehicle imports into the U.S. from Europe and Mexico (9%-10% of BMW's global sales volume) and to a lesser extent on electric vehicles (EVs) from China into Europe. One of the highest BEV sales

...The magnitude of BMW AG's June 2026 profit warning clearly illustrates difficult conditions in the Chinese market. On June 16, 2026, the company cut the guidance for this year's automotive EBIT margin to 1%-3% from 4%-6% previously. The main driver was weak sales volume in China, with BMW's sales plummeting by 20.4% in first-half 2026, slightly worse than the 19% in the overall passenger car market in China (see chart). This creates significant headwinds for BMW's profitability given the traditionally higher margins in this market, which is partly due to a greater share of higher-value vehicles. We currently project a decline of 5%-7% in overall Chinese light vehicle sales for this year, but downside risk to this forecast has materially increased....

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