The automaker cut its operating margin target to 1%-3% and warned of a sharp drop in pre-tax profits from €10.2 billion last year.
BMW issued a sharp profit warning, reducing its core automotive operating margin target to 1%-3% from 4%-6%. The company cited China’s economic slowdown and weakened consumer sentiment due to the Iran conflict as key drivers of the downgrade.
Pre-tax profits are now expected to decline significantly from last year’s €10.2 billion, reversing earlier forecasts of a mild cyclical dip. Free cash flow projections were also lowered to just above €2.5 billion. The warning marks a setback for new CEO Milan Nedeljković, who took over last month.
Shares plunged 7%, hitting their lowest level since late 2020. BMW announced accelerated cost-cutting measures, though these will incur a one-off financial penalty.