BMW cuts automotive outlook for second time as restructuring deepens

BMW Cuts Automotive Profit Outlook Again as Restructuring Deepens, China Weakens

BMW's Profit Warning and Industry Impact

Profit Margin Outlook Reduced

Nov 3 (Reuters) - BMW cut the profit margin outlook for its core automotive business on Tuesday 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.

Industry-Wide Downgrades

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.

Restructuring Initiatives

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.

Financial Forecasts and Market Reaction

EBIT Margin and Delivery Projections

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% and positive 0.5%, down from 1-3%.

Share Price Movement

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

Segment Deliveries and Cash Flow

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

Organizational Changes and Market Challenges

Accelerated Realignment

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

China Market Weakness

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.

Additional Information

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(Reporting by Abu Sultan in Bengaluru, Christoph Steitz in Frankfurt and Rachel More in Berlin; Editing by Vijay Kishore, Aurora Ellis and Sanjeev Miglani)