Samvardhana Motherson shares fall as BMW warns of lower profits amid China pressures

Samvardhana Motherson Ltd shares fell nearly 2% after BMW, a major client accounting for about 5% of its revenue, issued a profit warning.

BMW reduced its volume expectations for the Chinese market in the December quarter and now expects automotive EBIT margin for 2025 to be 5-6%, down from a previous target of 5-7%.

The company also lowered its projection for automotive free cash flow from above €5 billion to above €2.5 billion.

The changes in guidance are linked to weak sales in China, higher tariff costs, and payments to support dealers under pressure from lower commissions on local financial products.

BMW also postponed expected reimbursements of customs duties from US and German authorities, totalling a high three-digit million figure, from 2025 to next year.

Western automakers, including BMW, Audi, and Porsche, are facing strong competition in China from local EV makers such as BYD and Xiaomi, leading to declining unit sales.

Analysts note that pressures in China could eventually affect Europe as well. Industrial production in Germany fell in August, showing challenges for the country’s export-focused auto sector.

BMW claims that its next-generation EVs, including the newly launched iX3 SUV from its Neue Klasse line, will help support future sales.

Samvardhana Motherson shares fell 1.80 points, or 1.73%, to 102.30 around 2:30 p.m.