BMW issues 'significant' profit warning, Munich shares drop more than 7%
German luxury carmaker BMW warned that its 2026 annual profit will fall significantly below earlier guidance, citing weakness in the Chinese market and supply-chain shocks from the Iran conflict. Shares dropped more than 7% in Munich after the announcement.
BMW said second-half cashflow would also come under strain, with the automotive division's EBIT margin pulled down to a range of 6% to 7%. The company's deliveries in mainland China fell at a double-digit pace in the first half, as luxury rivals Mercedes-Benz and Audi struggled alongside it against the rapid rise of local premium brands.
Supply disruptions from the Iran theatre have hit the flow of electronics components reaching European plants via the Indian Ocean. BMW signalled temporary production stoppages on the Munich and Spartanburg lines and warned dealers that lead times for high-end models would lengthen. Speaking to investors in Frankfurt, chief executive Oliver Zipse said the company would unveil a fresh China strategy in the coming quarter.
The warning dragged Europe's automotive sub-index lower, with Mercedes-Benz shares slipping more than 2%. Bloomberg data showed Volkswagen Group analysts flagging similar pressure signals. BMW's board said it does not plan changes to the dividend policy but will review the share-buyback programme.
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