BMW cuts outlook again as it speeds restructuring and grapples with China slump

What BMW announced

Late Tuesday, BMW lowered its auto profit outlook again, guiding to carmaking returns in a band of negative 0.5% to 0.5% for this year versus the prior 1% to 3%. It also now expects vehicle deliveries to fall moderately from last year after previously signaling only a slight drop.

Excluding new structural and portfolio actions, BMW said the margin should be above 2%. Despite the downgrade, it still forecasts more than €2.5 billion in free cash flow from the automotive unit this year. More detail is due Wednesday with full third quarter results.

Restructuring moves and production plans

To stay competitive, BMW is cutting costs, reshaping its management ranks, and expanding the use of artificial intelligence across production sites and at its Munich headquarters. Nedeljkovic is pushing to trim about 8,000 jobs worldwide, roughly 5% of the workforce, plus around 100 high level managers, mostly in Munich, and the company said it is looking to accelerate these steps.

BMW indicated it is accelerating its timeline to increase output of next-generation vehicles, and intends to phase out legacy models sooner than it had planned. The company said those changes should lift profitability over the coming years.

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China pressure and the road back to margins

Following years in which China powered profits, BMW now confronts a sharp demand downturn there as rivalry from domestic players such as BYD Co. heats up - particularly in electric vehicles - while a property slump adds pressure. The company reported last month that regional deliveries declined 25% in the third quarter compared with a year earlier. Shipments rose in the Americas, with the US nearly overtaking China as the largest single market.

Looking ahead, BMW aims to raise its auto margin to as much as 5% as early as 2028, and to return to its long-term target range of 8% to 10% as the next decade begins. The bottom line: near term profitability is getting squeezed by China and restructuring, but BMW is tying a future margin rebuild to job cuts, AI driven efficiency, and a faster shift to new models.

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