By Fatma Younis
BMW has issued its second profit warning in a year, lowering its profit margin forecast to between -0.5% and 0.5% for 2026 as it absorbs restructuring costs including 8,000 job cuts in Germany. The German automaker cited intense competition from Chinese rivals as a key factor.
Profit Margin Slashed
The company reported an 11% drop in third-quarter pre-tax earnings to €2.1bn (£1.75bn). At the start of the year, BMW had targeted a margin of 4-6%. The operating margin in its core automotive business narrowed to 3.4%, down from 5.2% a year earlier, though it beat analysts' forecast of 3.1%. Excluding restructuring charges, the margin would be above 2%, within its previous forecast range, the company said.
China Sales Decline
Sales in China fell 22% in the first nine months of 2026, which BMW said was in line with the broader market downturn. Revenue for the quarter dropped 6% to €30.4bn, hurt by the declining Chinese sales.
Restructuring Costs
Chief executive Milan Nedeljković said the industry demands decisiveness and swift implementation of structural measures. The restructuring includes accelerated cuts to management functions and write-offs of previous vehicle and technology generations as BMW launches its new electric vehicle lineup, starting with the iX3 in China this month.
Industry Context
BMW follows Volkswagen in facing painful restructuring costs driven by rapid market changes. Rival Mercedes-Benz also reported lower third-quarter profits, while Porsche rebounded slightly after steep charges last year as it overhauls its model lineup and retreats from China.
