Five Major German Automakers See Profit Decline in 2025, Chinese Market Becomes Best Window for Transformation Observation

With the release of Audi’s financial report, the performance of the five major German automotive brands for 2025 has been announced.

As industry expectations predicted, influenced by multiple factors such as tariffs, challenges in electric transformation, and sluggish sales in the Chinese market, the five major German brands—including Volkswagen, Mercedes-Benz, BMW, Audi, and Porsche—will see a comprehensive decline in performance in 2025. In an increasingly uncertain external environment, the German automotive industry is currently “turbulent.”

On March 17, Audi released its 2025 financial report, showing that Audi’s total revenue for 2025 was €65.5 billion, a 1.5% increase year-over-year; operating profit was €3.37 billion, down 13.6% year-over-year.

“2025 is a highly challenging year. Geopolitical turmoil has intensified, U.S. tariffs have impacted, and competition in the passenger car market has increased, putting significant pressure on prices,” said Audi management after the earnings release. “Strict European carbon emission targets have also exerted financial pressure on the company. Among these, U.S. tariffs added €1.2 billion to Audi’s costs, nearly eroding 2% of the sales margin.”

Although this performance fell short of Audi’s expectations, its profit among the five German automakers is considered mid-to-high level. Earlier, BMW Group announced its 2025 financial results, with full-year revenue of €133.45 billion, a 6.3% decrease; pre-tax profit (EBT) of €10.236 billion, down 6.7%; and net profit of €7.451 billion, down 3.0%.

In terms of sales, BMW Group sold 2,463,681 new vehicles in the 2025 fiscal year, a 0.5% increase. China remains the group’s largest single market globally, but sales declined by 12.5%; Europe and the Americas saw growth of 7.3% and 5.6%, respectively.

“Based on the average sales over the past few months, China’s sales are expected to remain roughly the same as the previous year.” For the 2026 fiscal year, BMW Group expects that rising tariffs will further reduce the operating margin of its automotive division by about 1.25 percentage points.

Mercedes-Benz, a longtime rival, also faced difficulties. The financial report shows that in 2025, the group’s adjusted EBIT was €8.2 billion, down 40% from €13.7 billion in 2024; revenue was €132.2 billion, a decline of over 9% from €145.6 billion the previous year. Mercedes-Benz stated that efficiency improvement measures effectively mitigated the negative impacts of declining sales (especially in China), net price declines, tariffs, and exchange rate fluctuations.

As a major German automaker, Volkswagen’s performance in 2025 is highly representative. The financial report indicates that Volkswagen’s operating profit in 2025 was €8.9 billion, a roughly 54% decrease from €19.1 billion in 2024, the lowest since 2016. Porsche, which previously contributed over 30% of Volkswagen Group’s profit, became a significant drag. In 2025, Porsche’s revenue was €36.27 billion, down 9.51%; sales profit was €413 million, down 92.68%. Due to U.S. tariffs imposed in 2025, cost adjustments in Porsche, and intensified market competition, price and product mix changes have hampered profitability. Volkswagen warned that “business will remain difficult in the coming year” and plans to continue strict cost controls—aiming to cut about 50,000 jobs in Germany by 2030.

Notably, besides “shrinking” and “resetting,” the Chinese market remains an important window for observing the transformation of German automakers.

Regarding China, BMW will debut its dedicated new generation BMW iX3 long-wheelbase version at the Beijing Auto Show in April. This model, developed jointly by BMW and local R&D teams specifically for China, is seen as BMW’s “most Chinese-style” product. With this new vehicle as a symbol, BMW expects 2026 to be a year of product launches and deliveries in China, with about 20 new or facelifted models from BMW, MINI, and BMW Motorrad. Volkswagen Group has also announced that it will launch the “largest-ever” new energy vehicle offensive in China in 2026, with over 20 new models. Among these, Audi will introduce 8 new models, including the new Audi Q5L, Audi A6L, Audi A6L e-tron, and the second mass-produced model under the AUDI brand, the Audi E7X.

Similar to BMW’s “most Chinese-style” product strategy, Mercedes-Benz plans to release 7 China-exclusive models among the 40 new vehicles scheduled globally from 2025 to 2027; in 2026, Mercedes-Benz will launch over 15 new and facelifted models in China. Oliver Thne, a member of Mercedes-Benz’s board responsible for Greater China, stated that the company aims to improve profitability of electric vehicles in China through its new EV strategy.

“The company is making adjustments based on the Chinese market and consumer demands,” said Jochen Breckner, CFO of Porsche, during the earnings call. Porsche is attempting to further adapt to the Chinese market through localization, such as deeper cooperation with local partners in infotainment and digitalization. The new generation of in-car infotainment systems designed for China is planned to be launched in some models in 2026. According to the plan, Porsche will announce detailed measures for its “2035 Strategy” this fall.

(Source: Cailian Press)