BMW's New Chief Navigates Tariff Threats and China Headwinds With Local Production Muscle

BMW's new CEO Milan Nedeljkovi? inherits a turbulent era: China sales shrink, Trump threatens tariffs, but US production in South Carolina offers a key advantage.

The handover at the top of BMW could hardly come at a more turbulent moment. Milan Nedeljkovi?, the former production chief, took the wheel on Thursday, succeeding Oliver Zipse amid a trade war escalation and persistent weakness in the company's largest single market. The stock closed the week at €74.78, down 2.43% on Friday and 22.04% lower since the start of the year — a decline that reflects the market's deep unease about the forces converging on the Bavarian automaker.

Nedeljkovi? moves directly into a double bind. On one side, China, where BMW delivered roughly 625,000 vehicles last year, continues to shrink for foreign premium brands. The first quarter brought no relief. On the other, US President Donald Trump has revived the threat of 25% import tariffs on European cars, a blow that would hit any manufacturer without meaningful stateside production. BMW, however, holds an unusual trump card: nearly half of the vehicles it sold in America last year came from its sprawling plant in Spartanburg, South Carolina, making it the largest auto exporter from the US by value — an estimated $9 billion this year, according to the Commerce Department.

Trump has made clear that local production exempts companies from the proposed levies. BMW is leaning hard into that protection. The automaker is pouring $1 billion into electrifying its Spartanburg flagship, with production of pure battery-electric vehicles scheduled to begin by the end of 2026. A further $700 million is earmarked for a new battery assembly site in nearby Woodruff, South Carolina. Those locally made EVs will be tariff-free, giving BMW a structural advantage over German rivals that lack comparable US production footprints.

The advantage is all the more critical given the earnings outlook. BMW warned this week that its EBIT margin in the automotive segment will slip to a mid-single-digit percentage in 2026 as higher tariffs bite. For the first quarter, the margin came in at 5.0% — better than analysts had feared, but still a shadow of the 8%-plus target the company once aimed for. Pretax profit reached €2.3 billion, while revenue fell 8.1% to €31 billion, dragged down by the China slump. The Kiel Institute for the World Economy has warned of production losses in the billions if tariffs escalate.

The China front is where Nedeljkovi? must show early progress. BMW unveiled three new models tailored for the market at the Beijing auto show: a revamped 7 Series, plus long-wheelbase versions of the iX3 and i3. The company is leaning on local partners such as Momenta, DeepSeek and Alibaba Banma to integrate digital services and regain relevance against aggressive domestic rivals. "In China. For China. With China." is the mantra — operationally demanding and not yet reflected in the share price.

Europe offers a counterweight. BMW booked its highest-ever quarterly order intake in the region in the first three months of the year. Electric vehicle orders surged more than 60% year-on-year, with the iX3 attracting over 50,000 orders since its debut at the IAA. In Germany, sales rose 8.1% to 58,547 vehicles in the quarter, and March alone jumped 16.5%. That momentum is helping to offset some of the Chinese drag, but not enough to lift the stock.

The technical picture remains bruised. At Friday's close, the shares traded 12.99% below their 200-day moving average of €85.94 and only 4.59% above the year's low. Part of the recent weakness is mechanical: the stock went ex-dividend after the annual general meeting on Thursday, with the €4.40 per-share payout due on May 19. But the broader fall reflects a lack of conviction. Even as the company runs a second tranche of its share buyback program — €625 million, to be completed by the end of August — the market is waiting for tangible proof that the China offensive can stabilize orders and that the US tariff shield will hold.

VDA president Hildegard Müller provided a sobering backdrop, forecasting that German auto industry employment will shrink by 225,000 jobs by 2035, with 100,000 already lost since 2019, mostly among suppliers. For BMW's new CEO, the immediate task is to demonstrate that local production muscle and a product push in China can together repair margins — because without visible improvement, €625 million in buybacks alone will not change the narrative. Chart watchers see initial resistance around €95, a level that seems distant from today's €74.78 but would mark a first step toward regaining investor trust.