BMW Cuts 2026 Outlook Again as China Slump and Restructuring Costs Bite

BMW lowered its 2026 profit forecast for the second time in less than five months, saying it now expects the margin in its car business to land between minus 0.5% and plus 0.5% this year, as it speeds up restructuring that includes 8,000 job cuts in Germany.

The Munich carmaker announced the change late Tuesday and released third-quarter results Wednesday. Its longer-term target remains an 8% to 10% auto margin by the start of the next decade, with an interim goal of 3% to 5% in 2028.

Third-quarter numbers

Pretax earnings fell 11% to 2.1 billion euros, about $2.4 billion, in line with analyst expectations, Reuters reported. Net profit dropped nearly 15% to 1.45 billion euros, and revenue slipped about 6% to 30.45 billion euros, according to DW.

The auto business posted a 3.4% operating margin, down from 5.2% a year earlier but above the 3.1% analysts had forecast, Reuters said.

China and US tariffs weigh

BMW’s deliveries in China fell 24.8% in the quarter, pulling global deliveries down 6.3%, DW reported. Higher sales in the United States and Europe only partly offset the decline.

Finance chief Walter Mertl said elevated tariffs cut about 1.25 percentage points from the quarter’s auto margin. Chief executive Milan Nedeljkovic said the company is studying a new model above the BMW X7 built for the US market.

Faster job cuts

BMW said the costs of its workforce program will be booked in the fourth quarter. Expanded measures, including phasing out older vehicle generations sooner, are now expected to reduce the full-year auto margin by about 2.5 percentage points, double the earlier estimate.

Mertl said the margin would still be above 2% without those measures. BMW also said it will weigh the restructuring impact when setting shareholder payouts for 2026.

“Current developments in our industry call for decisiveness and swift implementation,” Nedeljkovic said, according to Reuters. BMW shares rose Wednesday despite the cut, Reuters reported.

Sources: BMW Group, Reuters, DW.