BMW cuts automotive outlook for second time as restructuring deepens

BMW cut the profit margin outlook for its core automotive business on Tuesday (Nov 3) for the second time in five months, citing one-off costs from accelerating job cuts and restructuring it launched this year as demand in China weakened.

BMW’s warning is one of a raft of profit downgrades from German automakers, including Mercedes-Benz, which only last week slashed its profit outlook due to prolonged weakness in China, the world’s top auto market.

The slump has triggered major restructuring programmes, including at Volkswagen as well as BMW, which recently unveiled plans to restore investor confidence — including around 8,000 job cuts — following a string of profit warnings tied to China.

Citing a non-operating hit to its profit due to its decision to “expand and intensify portfolio and structural measures”, BMW said its 2026 automotive EBIT margin was now forecast to be between negative 0.5 per cent and positive 0.5 per cent, down from 1-3 per cent.

Frankfurt-listed shares in the group, which is due to report third-quarter results on Wednesday, were 3.4 per cent lower at 2040 GMT.

BMW also now forecasts a moderate decrease in automotive segment deliveries in 2026, which equates to a decline of 5-9.9 per cent. Automotive free cash flow is meantime still seen at more than 2.5 billion euros (US$2.8 billion), BMW said.

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The automaker said it intends to accelerate the implementation of its organisational realignment, and as a result, will cut management functions faster than announced.

The weakness in the Chinese market has been particularly tough for established premium automakers, which face local customers increasingly going for cheaper home-grown brands, thereby removing a previously reliable profit stream. REUTERS