BMW Group has just significantly lowered its 2026 earnings outlook on June 16 due to the Middle East tension and also slowing sales in China.
Yes, BMW revised down its operating margin forecast for its core automotive segment from the previous range of 4%–6% to 1%–3%, and now expects a slight decline in vehicle deliveries for 2026, compared with its earlier projection of flat volumes year-over-year and China seems to be the biggest stumbling block for the brand.
BMW also anticipates a pre-tax profit drop of more than 15%, substantially steeper than its prior estimate of a modest decline. On the day the announcement was made, BMW’s shares fell 6.6% on the Frankfurt Stock Exchange, closing at €181.
The automaker stated that the Middle East conflict has driven up energy prices and dampened global consumer appetite for car purchases, with adverse effects exceeding initial expectations. To counter mounting market pressures, BMW will accelerate cost-cutting initiatives and restructure its organization and business processes.
These adjustments are expected to result in one-off financial losses in the second half of 2026, though specific details were not disclosed. BMW acknowledged that despite continued growth in the U.S. and European markets, these gains cannot offset the sales decline in China which is the world’s largest single automotive market.
Meanwhile, BMW is pushing deeper localisation by partnering with Chinese tech giants. Future models specifically tailored for China will feature Huawei’s HarmonyOS ecosystem, DeepSeek language models, and advanced L2+ assisted driving from Momenta.
Other German automakers are currently grappling with intense price competition in China just like BMW.
