BMW cuts 2026 car margin forecast to near zero, warns of possible loss

BMW issued its second profit warning of 2026 on November 3, cutting the expected core profit margin for its cars business to between minus 0.5% and plus 0.5%. The German automaker said the unit could therefore post an operating loss for the full year. The new forecast replaces the 1% to 3% range set in June, which had already been reduced from the original 4% to 6% outlook.

The warning arrived the night before BMW’s third-quarter results were published on November 4. Group net profit fell about 15% to 1.44 billion euros, while revenue slipped nearly 6% to 30.45 billion euros. BMW’s profit before tax for the third quarter was 2.083 billion euros, down 10.6% from the same period in 2025.

“We will adapt our current structures and processes to the drastic downturn in market conditions.”

BMW attributed the cut to restructuring costs and portfolio measures affecting the fourth quarter. Its redundancy program is moving faster than expected, leading to larger-than-planned severance payments. Costs tied to ramping up production are adding further strain.

The company said it intends to leverage the momentum from its workforce restructuring to expand organizational and process realignment more quickly. It also announced that reductions in management functions will be implemented faster than previously announced.

China remains a major drag on BMW’s results. Deliveries in the China region fell 24.8% in the third quarter. The automaker is adapting production and its portfolio to demand for new electric Neue Klasse vehicles while cutting organizational costs.

Excluding restructuring measures, BMW still expects an operational automotive margin above 2% for the full year. It also maintains a target of more than 2.5 billion euros in free cash flow for the car division. The revised RoCE range for the automotive sector is minus 1% to plus 1%, down from 1% to 5% previously.

Rivals Mercedes and Volkswagen also fell on concerns about their own exposure to China. After BMW’s June warning, its shares dropped 13% within days, and UBS estimated the cut removed about 2 billion euros from profits.