The warning adds pressure on European auto stocks heading into Frankfurt’s open, with Mercedes-Benz and Volkswagen exposed to the same China weakness. The cut is partly self-inflicted, through faster restructuring and production ramp-up costs, so investors may treat it as less severe than a pure demand shock. The intact cash flow target supports that reading. Still, a margin range that includes a loss is a striking signal for a premium carmaker, and it could reinforce caution on the sector’s China exposure. Wednesday’s results will decide whether the selloff deepens or stabilises.
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BMW’s car business could now lose money this year, though part of the damage comes from cutting jobs faster and building popular new models, not just from China.
Summary:
BMW cut its 2026 automotive operating margin forecast to minus 0.5% to plus 0.5%, from 1% to 3% set in June
It is the company’s second profit warning this year
Faster job cuts will bring larger severance costs in Q4, and management roles will be reduced more quickly
Strong demand for Neue Klasse models requires costly extra shifts
Deliveries are now expected to fall more steeply than planned, while the automotive free cash flow target of above €2.5bn holds
BMW reports Q3 results on Wednesday
BMW issued its second profit warning of the year on Tuesday, cutting its forecast for the core margin at its car business to a range that includes the possibility of an operating loss. Faster job cuts are adding to costs, and demand in China remains weak.
The Munich-based carmaker now expects its automotive operating margin to come in between minus 0.5% and plus 0.5% in 2026. In June it had forecast a range of 1% to 3%, which was itself a downgrade from its outlook at the start of the year. Frankfurt-listed shares fell about 3% in evening trade after the announcement, according to Reuters.
BMW said its redundancy programme was moving faster than planned, which will bring larger severance payments in the fourth quarter. The company said it would use that momentum to accelerate a wider overhaul of its organisation and processes, including cutting management roles more quickly than previously announced. Earlier plans had included about 8,000 job cuts.
Part of the pressure reflects stronger demand. BMW said sales of new models built on its Neue Klasse platform were running high enough to require extra production shifts, adding costs in the near term.
Even so, the company now expects deliveries to fall more steeply this year than it had anticipated. Reuters reported the decline in automotive deliveries at between 5% and 9.9%. BMW, whose brands include Mini and Rolls-Royce, delivered about 2.5 million vehicles last year.
The company still expects automotive free cash flow above €2.5bn, which suggests the cut reflects one-off charges more than a collapse in underlying cash generation.
China remains the central challenge. Like its German rivals, BMW faces fierce competition and falling demand in the world’s largest car market, where buyers are increasingly turning to cheaper local brands. Mercedes-Benz and Volkswagen have also issued profit warnings this year and are cutting jobs to reduce costs.
BMW reports third-quarter results on Wednesday, when investors will look for detail on the size of the restructuring charges and any sign that demand in China is stabilising.
This article was written by Eamonn Sheridan at investinglive.com.
