MW BMW issues a big profit warning it once again blames on China. The automaker is plotting a major strategy shift

By Steve Goldstein

BMW said the Chinese car market, particularly for non-electric vehicles, is struggling.

BMW was the worst performing major European stock on Wednesday after the luxury-car maker lowered its profit outlook, citing a downturn in China as well as the impact from the Middle East war.

BMW says it now expects its pretax profit to fall significantly this year, versus a prior expectation of a moderate decline, and for deliveries from the auto segment to slip vs. a previous expectation of a flat performance. Margins from the automotive segment are expected in a 1% to 3% range, vs. 4% to 6% previously.

Analysts say the new guidance implies a EUR3 billion ($3.5 billion) reduction to operating profit forecasts.

BMW shares (XE:BMW) fell 7%, extending this year's stock-price decline to 31%.

Of its major German rivals, Mercedes-Benz shares (XE:MBG) fell 3% as Audi owner Volkswagen (XE:VOW3) shed2%.

BMW put most of the blame on the Chinese automotive market, and in particular non-electric vehicles there. "This situation has resulted in intensified competition in China and across the Asia-Pacific region," said BMW. "Positive sales volume development in Europe and the U.S. cannot offset the decline in sales in China and the Asia-Pacific region."

BMW said it "will intensify and accelerate its ongoing cost reduction initiatives through further structural and efficiency measures," as the company's capital-markets day in September now takes on added importance.

Analysts at Jefferies led by Philippe Houchois said that could mean a rethinking of its global assembly business model, that's still reliant on exporting powertrain components from Germany.

Deutsche Bank analysts say the stock will struggle until the new plan is announced. "We fear the stock could have a hard time performing until then especially as: a) after three profit warnings in the last 2 years, all largely China-related, BMW's nimbus of the 'steady Eddy' in Autos clearly took a hit and b) the company did provide a reasonable bridge to its strategic margin target of 8-10% as recently as six weeks ago, which is now in question given the lower base. We are also still somewhat puzzled by the size of the cut and we do not think we are alone in that respect," they said.

-Steve Goldstein

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June 17, 2026 04:11 ET (08:11 GMT)

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