BMW shares dropped around 8% in early Frankfurt trading after the German automaker issued a profit warning late Tuesday, citing weaker demand in China and the economic fallout from the Iran war.
The company said the combined pressures had significantly affected pricing and customer sentiment, prompting a downward revision to its outlook that analysts described as steeper than expected.
BMW has now lowered its operating automotive margin forecast to between 1% and 3%, down from 4% to 6% previously, signalling a sharp squeeze on profitability.
In response, the group said it would step up cost-cutting measures, though it warned these efforts would result in a one-off impact in the second half of 2026.
Analysts at Deutsche Bank and Jefferies said the revision suggests a broader strategic rethink, with Jefferies noting potential changes to BMW’s global production footprint, particularly its reliance on exporting internal combustion engine components from Germany.
The weaker outlook adds to growing concerns over the premium carmaker’s exposure to China’s slowing demand and ongoing geopolitical uncertainty, both of which are weighing heavily on the sector.
Reuters
