BMW announced on June 16 that it reduced its 2026 operating margin forecast for the automotive segment to 1%-3%, down from a previous 4%-6% range [1, 2]. The company now expects group profit before tax to fall by more than 15%, a sharper decline than the moderate drop it had predicted earlier [1, 3].
BMW also revised its core vehicle delivery forecast in 2026 to a slight decline, compared with earlier expectations of stable volumes [1, 4]. The weakened outlook stems primarily from worsening demand in its largest market, China, combined with negative effects from the ongoing Iran war in the Middle East. Higher energy costs and deteriorating consumer sentiment globally added further pressure [1, 4, 2].
Positive sales developments in Europe and the U.S. failed to offset falling sales in China and the broader Asia-Pacific region, the company said [1, 5]. BMW plans to accelerate and intensify cost-cutting measures to address the downturn. CEO Milan Nedeljkovic, appointed in May 2026, said, "We will significantly intensify and accelerate our ongoing measures... to adapt current structures and processes to the drastic downturn in market conditions" [1, 3]. The company expects these efforts to cause a one-time negative earnings impact in the second half of 2026 [1].
BMW's forecast for return on capital employed (ROCE) in the automotive segment was cut to 1%-5% from 6%-10% [6]. The profit warning sent BMW shares sharply lower on June 16 and 17, dropping 6.5% to 6.9% in Frankfurt and New York to levels not seen since September 2020 [1, 5]. JPMorgan analyst Jose Asumendi called it a "radical earnings cut" and a "wake-up call" for the car industry [2]. Meanwhile, Jefferies analyst Philippe Houchois said BMW may be reconsidering its global assembly business model that still relies heavily on exporting combustion-engine cars from Germany [2].
Despite the challenges, BMW plans to launch its iX3 Neue Klasse SUV in China in November 2026 [2]. The company is also set to release its half-year 2026 interim financial report on July 30 [6].
