Core Insights - BMW Group reported a slight increase in global sales for 2025, delivering 2,463,715 vehicles, marking a 0.5% year-on-year growth, halting the decline seen in 2024 [2] - However, the Chinese market, BMW's largest single market, experienced a significant decline for the second consecutive year, with sales dropping 12.5% to 625,527 vehicles [2][5] - The contrasting performance across regions highlights the challenges faced by traditional luxury brands in adapting to the rapidly evolving automotive landscape, particularly in China [2][7] Global Performance Overview - BMW's global performance in 2025 can be summarized as "overall stabilization with regional differentiation," with a total of 668,000 vehicles delivered in Q4, a 4.1% decline year-on-year, but still achieving a 0.5% growth for the year [3] - The European market was a key driver, with sales reaching 1,016,360 vehicles, a significant increase of 7.3%, and electric vehicle sales in Europe surged by 28.2%, accounting for about 25% of total sales in the region [3][4] Regional Sales Breakdown - In the Americas, BMW's sales totaled 508,200 vehicles, reflecting a 5.7% increase, with the U.S. market contributing 417,638 vehicles, up 5% [4] - In contrast, the Asian market, particularly China, saw a decline, with total sales in Asia at 871,000 vehicles, down 9.3%, and the Chinese market's performance dragging down overall results [5][6] Electric Vehicle Transition - BMW's global electric vehicle sales reached 642,000 units in 2025, a growth of 8.3%, representing 26% of total sales, with pure electric vehicle sales at 442,000 units, up 3.6% [5] - The electric vehicle penetration rate in China was approximately 26%, lower than the average for luxury vehicles in the Chinese market, indicating challenges in competitiveness [5][7] Challenges in the Chinese Market - The decline in sales in China is attributed to increased competition from local brands like NIO and BYD, which are rapidly gaining market share in the high-end segment [7][8] - BMW's electric vehicle offerings in China, based on traditional fuel platforms, are perceived as less competitive compared to local brands, which are more aligned with consumer expectations for technology and performance [7][8] Strategic Responses - In response to the challenges, BMW plans to launch around 20 new models in China by 2026, including the new generation BMW iX3, designed specifically for the Chinese market [8][9] - Additionally, BMW has significantly reduced the official prices of 31 models in early 2026, with reductions exceeding 10% for many models, aiming to enhance market penetration and consumer appeal [9]

Group 1 - BMW is recalling over 330,000 vehicles globally due to corrosion risks in the starter relay, which may lead to short circuits and fire hazards [1][2] - The recall affects multiple models produced between September 2015 and September 2021, with over 130,000 vehicles in Germany and nearly 200,000 in the United States [1][2] - This is BMW's sixth major recall since 2025, following a significant recall of over 230,000 electric vehicles in August due to issues with the starter generator [2][3] Group 2 - BMW's sales in China have shown a declining trend, with a 6.4% drop in 2022, a slight recovery in 2023, and a projected 13.4% decline in 2024 [4] - The company's financial performance reflects this sales decline, with a 8.2% decrease in revenue to €33.93 billion and a 31.4% drop in EBIT to €2.66 billion in Q2 2025 [4] - The decline in sales is attributed to the rapid rise of domestic brands in the electric and intelligent vehicle sectors, which has impacted traditional luxury brands [4] Group 3 - In response to market challenges, BMW has made significant personnel changes, appointing its first female CEO for Brilliance BMW and committing to invest more in the Chinese market [5] - The company plans to launch over 20 new models, including the first new-generation model in Shenyang in 2026, as part of its strategy to regain confidence in the Chinese market [5] - The automotive industry is facing increasing consumer demands for product quality and safety, necessitating a new quality control system that extends beyond hardware to software and electronic control units [5]

Investment Rating - The investment ratings for Stellantis, Renault, and Volkswagen are all rated as Neutral [4][49]. BMW is rated as Buy [49]. Core Insights - Chinese OEMs have increased their market share in Europe to 6%, with 11% in the EV segment, indicating a significant acceleration in their presence [2][29]. - The report highlights that the focus of Chinese brands has shifted towards the mass market, particularly in the entry segment, which is less profitable for incumbent OEMs [2][3]. - Stellantis is identified as the most vulnerable to competition from Chinese brands, followed by Renault and Volkswagen, particularly in the A/B segments where they have high exposure [4][6]. Summary by Sections Market Share and Competition - Chinese brands are correcting past mistakes and expanding their offerings, achieving notable success in Spain and Italy, where they hold a cumulative market share of 9% [3][14]. - The entry segment under €25k is particularly attractive for Chinese brands, as legacy brands have reduced their offerings in this price range [3][30]. Company-Specific Analysis - Stellantis has the highest exposure to the competitive threat from Chinese brands, especially in Italy and Spain, where their market share is significant [4][21]. - Volkswagen has benefited from Tesla's recent weaknesses, with a 59% year-on-year increase in Q1 BEV sales, primarily in the corporate fleet segment [4][29]. - BMW is expected to benefit from strong EV demand, particularly with the launch of the Neue Klasse and the iX3, which offers an unprecedented range and fast charging capabilities [4][30]. Future Outlook - The potential replacement of EU EV import tariffs with minimum pricing could intensify competition for affordable BEVs from Chinese manufacturers [2][30]. - The report anticipates that the growing strength of Chinese brands in the entry segment could pose challenges for Volkswagen's upcoming models, such as the ID.2 and ID.1 [4][30].