BMW warns of steep profit drop amid China slump and Middle‑East tension

BMW AG issued a profit warning for 2026, cutting its pre‑tax earnings forecast by at least 15% and revising the automotive EBIT margin target from 4‑6% to 1‑3%. The company cited a sharp decline in Chinese demand – sales in China fell roughly 20% – and heightened geopolitical tension in the Middle East, which has driven up energy costs and disrupted supply chains. The warning sent BMW shares down more than 7% across European markets, taking the stock to its lowest level since November 2020.

Supervisory board chairman Nicolas Peter told reporters that the firm is “on the right track” with its new‑generation “Neue Klasse” models, while analysts at Berenberg noted that “the magnitude of this latest downgrade – the third predominantly China‑driven downgrade in as many years – is greater than we had anticipated.” In response, BMW plans accelerated restructuring and cost‑saving measures, with a one‑off profit impact expected in the second half of 2026. The outlook underscores broader challenges for European automakers amid a price‑war in China and ongoing geopolitical instability.