BMW Evades Tariffs, Adidas Loses in the Market - The Reality of "De-globalization" Striking European Companies

German BMW, sports giant Adidas, and Swedish Volvo Cars. At first glance, these three companies differ in business content and customer base.

However, when you line up the news reported in succession at the end of July 2026, one major change running through the current global economy emerges.

It is that companies are being forced from the traditional global management of "producing in the most efficient places worldwide and selling globally" to "producing within the country of sale and adapting to that country's politics, security, and employment policies."

BMW is exploring ways to avoid U.S. import tariffs, Adidas achieved record sales due to the Soccer World Cup but received harsh evaluations from the stock market, and Volvo is deepening its relationship with the electric vehicle brand Polestar, which it once reduced financial support for.

It is not a simple story of success if products sell.

Where was it made? Which country do the parts and software originate from? When will the advertising expenses be recouped as profits? Will the government consider it a "safe company"?

The conditions determining corporate value are rapidly increasing.

BMW's trump card of having the "largest factory in the U.S."

The main reason BMW can maintain a relatively strong stance against U.S. tariff policies is its massive production base in Spartanburg, South Carolina.

This factory produces SUVs centered on the X series, which are sold domestically in the U.S. and exported worldwide. For BMW, Spartanburg is not just a factory for the U.S. market but also an export base sending products to the global market.

BMW's management hopes to reflect this export performance in the calculation of import tariffs. In other words, they want consideration not only for vehicles brought from Europe to the U.S. but also for the value of vehicles produced in the U.S. and sent overseas.

If adjustments such as subtracting export amounts from import amounts are allowed, BMW's tariff burden, which employs, produces, and exports on a large scale in the U.S., could be significantly reduced.

BMW's argument contains logic that is difficult for the U.S. government to ignore.

The Spartanburg factory and related facilities create local employment and contribute to U.S. automobile exports. Even if European-made BMW vehicles are excluded by tariffs, weakening domestic investment and exports could contradict the policy goal of "America First."

However, BMW is not unaffected by tariffs.

The company expects the impact of tariffs to lower the profit margin of its automotive division by about 1.25 points in 2026. Although sales increased in the U.S. and Europe in the first half of 2026, they could not fully compensate for the slump in the Chinese market, and global sales fell below the previous year.

For BMW, the U.S. factory is a breakwater but not an all-powerful shield.

Even U.S.-made vehicles could be affected by tariffs if they use imported parts, electronics, and materials from abroad. Changing only the final assembly location of vehicles will not eliminate the burden unless the entire supply chain is localized.

On social media: "Won't U.S.-made BMWs eventually become more expensive?"

On BMW-related forums and social media, while there is a view that SUVs produced at the Spartanburg factory are more advantageous than imported finished vehicles, there is also speculation that instead of raising prices only for models that cannot avoid tariffs, the cost might be gradually passed on to all models.

There is a suggestion that to maintain price differences between models, the tariff costs of German-made models might be widely distributed to U.S.-made models as well.

Additionally, there are realistic posts such as "Even if assembled in the U.S., tariffs on parts remain" and "Not all X series are U.S.-made."

These reactions highlight that what matters to consumers is not the tariff rate itself but how the final sale price, delivery time, and available models change.

Whether companies bear the tariff costs, reduce discounts at dealerships, or pass them on to consumer prices, the perception of the same policy can vary greatly.

Adidas sold despite record sales

While BMW faces political and tariff issues, Adidas was confronted with the harshness of the stock market.

The company's sales for the second quarter of 2026 reached approximately 6.7 billion euros, a record high for a quarter. Sales excluding currency fluctuations increased by 14% year-on-year, driven by growth in soccer goods and the running sector.

In the 2026 Soccer World Cup, Spain and Argentina, to which Adidas provided uniforms, advanced to the finals. Uniform sales significantly exceeded the previous tournament, and official balls and related products also performed well.

Normally, this would seem like an impeccable achievement.

However, after the announcement, Adidas shares temporarily fell by about 19%, marking a record plunge.

The cause was not sales but profits.

Operating profit for the second quarter increased by 5% to 574 million euros but fell short of the market forecast of about 623 million euros. Advertising and marketing investments related to the World Cup increased by 212 million euros from the previous year, squeezing profit margins.

Adidas raised its full-year sales growth forecast from the previous "high single digits" to 9-10%. However, the operating profit forecast remained unchanged at about 2.3 billion euros.

From an investor's perspective, if sales are growing this much, the profit forecast should have been revised upward as well.

It's not about "good results" but whether "expectations were exceeded"

The Adidas case shows that in the stock market, it's not just about whether performance is good or bad, but how much it exceeded prior expectations.

Even before the World Cup began, Adidas was expected to have a strong tailwind. The tournament was held in North America, and the contracted teams Spain and Argentina advanced to the finals, with record sales of uniforms and related products.

Success was already priced into the stock, so record sales alone could not surprise investors.

Instead, attention was focused on how much profit remained relative to sales growth and whether growth could be maintained after the tournament ended.

Adidas management explains that advertising investment leads to brand strength and future sales. The campaign, reportedly viewed about 9 billion times on social media, may hold value beyond short-term advertising efficiency.

However, the market prioritized the current profit margin over "future value."

This is an important lesson for Japanese companies as well.

Japanese companies often explain collaborations with major sports events, anime, celebrities, and sponsorship of overseas events as "increased recognition" and "great response."

But investors want to know more than just view counts and buzz.

How many new customers were gained? Did the product unit price increase? Did they become repeat customers? How many years will it take to recoup the advertising costs?

Unless the path from brand investment to profit is shown, even a successful campaign may not lead to a rise in stock prices.

On social media: "The brand won, but shareholders lost"

Online reactions surrounding Adidas are largely divided into two.

On one hand, there are voices highly appreciating the supply of uniforms to both finalist countries and the increase in sales of soccer goods and apparel. Especially from a consumer perspective, support for Adidas's retro models, soccer shirts, and everyday sneakers remains strong.

On the other hand, from an investor's perspective, there is strong caution: "Despite record sales, the profit margin decreased," and "If they can't raise profit forecasts even in such an ideal World Cup, what will happen afterward?"

In other words, being a brand loved by consumers and being an attractive investment at the current stock price are separate issues.

Even if brand support is strong on social media, if the stock market doubts profitability, stock prices will fall. Adidas's sharp decline clearly demonstrated this difference.

Volvo returns to Polestar after once distancing itself

The third movement is the reevaluation of the relationship between Volvo Cars and Polestar.

Polestar originally handled high-performance models of Volvo cars but later transitioned into an independent luxury EV brand.

However, due to sluggish EV demand, price competition, and increased development costs, the business deteriorated. After going public, its stock price fell significantly, and in 2024, Volvo essentially stopped new financial support for Polestar and distributed most of its shares to its own shareholders.

At that point, it seemed Volvo was prioritizing its own business reconstruction by distancing itself from the deficit-ridden EV brand.

However, in 2026, the tide changed again.

Volvo advanced plans to convert about $300 million in loans to Polestar into equity, raising its stake to about 19.9%. The repayment deadline for the remaining loans was also extended to 2031.

Furthermore, production of the Polestar 3 was consolidated at Volvo's U.S. South Carolina plant, and future models in Europe are planned to be produced at Volvo's Slovakia plant, strengthening the sharing of factories and technical bases between the two companies.

This is not a simple bailout.

Due to the global slowdown in automobile demand and the regionalization of the EV market, Volvo, Polestar, and their parent company, China's Geely Automobile, are losing the luxury of having separate facilities.

Even if the brands remain separate, platforms, factories, parts, software, and logistics must be shared. Polestar needs to survive as an independent brand while using Volvo and Geely's assets.

Why the U.S. rejected Polestar

More serious for Polestar is the issue of being effectively shut out of the U.S. market.

The U.S. Department of Commerce did not grant Polestar the necessary authorization to sell 2027 models and beyond, citing regulations on connected car technology related to China.

The regulations cover hardware and software related to communication functions, vehicle data, Bluetooth, Wi-Fi, and mobile lines.

Importantly, even if vehicles are assembled domestically in the U.S., sales may be impossible if capital relations with China or software supply networks are problematic.

Meanwhile, Volvo, which belongs to the same Geely group, was conditionally allowed to continue sales in the U.S.

Even within the same corporate group, sharing some factories and technology, different judgments were made for each brand.

This difference has caused confusion among U.S. Polestar users and dealership stakeholders.

Polestar owners fear used prices and repair systems

In the Polestar user community, after reports of the U.S. sales ban, posts such as "I like the car itself, but I'm worried about future resale value," "Will parts supply and warranty repairs continue?" and "Will asset value plummet even though I still have a loan?" appeared one after another.

Although it is explained that repairs and warranty responses for existing vehicles will continue, if the new car sales network shrinks, the convenience of service bases and used car prices may be affected.

Additionally, there are many voices questioning why Volvo was approved while Polestar was not, despite both having the same parent company and technical background.

What should be noted here is that regulations affect not only new car sales but also the asset value of consumers who have already purchased vehicles.

In the era when automobiles were machine-centered products, even if manufacturers withdrew, as long as there were parts and repair shops, cars could be driven for a long time.

However, current EVs and connected cars are highly dependent on communication services, apps, cloud, map updates, and software updates.

If a brand withdraws from the market, consumers may lose not just dealerships but also the continuity of digital services, which affects vehicle value.

For Japanese companies, BMW is a "preceding model"

The BMW case is not irrelevant to Japanese automobile manufacturers.

Japanese brand automakers produced over 3.1 million units in the U.S. in 2025. Cumulative U.S. manufacturing investment reached $70 billion, with 26 manufacturing sites, 41 R&D facilities, and 65 logistics facilities.

About one in three cars produced in the U.S. is said to be a Japanese brand.

Toyota, Honda, Nissan, Subaru, and others have expanded U.S. production over decades. In this respect, like BMW with its Spartanburg plant, they can use local employment as a bargaining chip.

However, there are differences in resilience among Japanese companies.

The impact of tariffs differs between companies that produce most of the cars they sell in the U.S. locally and those with a high import ratio from Japan or Mexico. Even if they have a finished vehicle plant, if they import engines, batteries, semiconductors, and electronic parts from abroad, they cannot completely avoid cost increases.

Furthermore, as shown by the Volvo and Polestar example, in the future, "where it was assembled" will not be enough.

Where was the onboard OS developed? Who supplies the communication modules? To which country's server is the driving data sent? Who are the major shareholders?

Japanese car manufacturers are advancing joint development with Chinese companies and adopting Chinese-made parts. While this becomes a competitive advantage in the Chinese market, it can pose regulatory risks in the U.S. market.

The strategy of selling the same vehicle worldwide is becoming increasingly difficult.

"Expectation management" also approaches Japanese sports and consumer goods companies

The sharp drop in Adidas's stock price is an important warning for Japanese companies outside the automotive industry.

Global companies are required to invest in brands using major sports events, games, anime, music, and influencers even after the Tokyo Olympics.

However, investors are becoming stric