BMW issues second profit warning in a year

Premium German car maker BMW issued its second profit warning for the financial year on Tuesday, citing costs related to job cuts as well as a production ramp-up.

The core profit margin at the cars business was now seen at between -0.5% and +0.5% in 2026, BMW said, meaning it could make an operating loss in its key activity.

That compares with the core profit margin of between 1% and 3% that the Munich-based manufacturer expected back in June, itself a cut in its expectations at the start of the year.

Like its peers, BMW has struggled with cutthroat competition and falling demand in China, the world’s largest car market.

Competitors Mercedes-Benz and Volkswagen have both also issued profit warnings this year and, like BMW, plan job cuts to bring costs down.

In its latest warning, BMW said its redundancy programme was moving faster than expected, resulting in bigger-than-anticipated severance payments for the final quarter of the year.

“The company intends to leverage the momentum generated by its workforce restructuring programme to expand its organisational and process realignment more quickly,” it said.

“The reduction in management functions will be implemented faster than announced.”

Strong demand for new models based on the firm’s Neue Klasse platform meanwhile meant the company would incur charges to bring in extra shifts, it said.

Car and motorbike deliveries for the year are nevertheless expected to fall more steeply than expected, BMW said.

Across its brands – which, apart from the namesake, include Mini and Rolls-Royce – BMW last year delivered a total of 2.46 million vehicles.

– AFP