BMW has reported a 36 per cent fall in profits last year following weak demand in China and a global recall of cars and has warned it expects earnings will remain at a similar level this year because of new European and US tariffs.

BMW AG’s carmaking profits will lag well below its long-term targets this year, weighed down by escalating trade tensions between the US and Europe and muted sales in China. The German manufacturer expects an automaking margin of between 5% and 7% this year,