BMW Faces Second Profit Warning as It Accelerates Cost-Cutting Measures

BMW shares rose 2.3% on Wednesday despite the German automaker lowering its 2026 financial outlook for the second time this year and reporting a sharp decline in quarterly profits. The company now expects its 2026 operating margin in the core automotive business to range between -0.5% and 0.5%, well below its long-term target of 8% to 10%, as it prepares for significant restructuring charges in the fourth quarter.

CEO Milan Nedeljkovic said BMW would accelerate structural changes and speed up cuts to management functions to address growing industry challenges. The company launched a redundancy programme in Germany in July to eliminate 8,000 jobs and completed the process within three weeks. European automakers are facing pressure from declining sales in China, US tariffs and rising competition from lower-cost Chinese manufacturers. Analysts have welcomed BMW’s willingness to adapt but warned that further industry challenges remain.

BMW is looking to its new Neue Klasse model range to support growth, particularly in China, where sales fell 22% during the first nine months of 2026. The new iX3 electric SUV is expected to help strengthen its position in the market following a positive start in Europe. BMW reported third-quarter pretax earnings of €2.1 billion ($2.4 billion), while its core automotive operating margin declined to 3.4% from 5.2% a year earlier, although it remained above analysts’ expectations of 3.1%.