BMW cuts automotive outlook for second time as restructuring deepens

Nov 3 (Reuters) - BMW cut ‌the profit margin ​outlook ​for its core automotive business on Tuesday for the second time in five months, citing one-off costs from accelerating ‌job cuts and restructuring it launched this year as ⁠demand in China weakened.

BMW's warning is one of a raft of profit downgrades from ‌German automakers, including Mercedes-Benz, ‌which only last week slashed its profit outlook due to prolonged weakness in China, the world's top auto market.

The slump has triggered ​major restructuring programmes, including at Volkswagen as well as BMW, which recently unveiled plans to restore investor confidence — including around 8,000 ⁠job cuts — following a string of profit warnings tied to China.

Citing a non-operating hit to ​its profit due to its decision to "expand and intensify portfolio and structural measures", BMW said its 2026 automotive EBIT ​margin was now forecast to be ‌between negative 0.5% and positive 0.5%, down from 1-3%.

Frankfurt-listed shares in the group, which is due to report ⁠third-quarter results on Wednesday, were 3.4% lower at 2040 GMT.

BMW also now forecasts a moderate decrease in automotive segment deliveries in 2026, which equates to ⁠a decline of 5-9.9%. Automotive free cash flow is meantime still seen at ​more than €2.5 billion ($2.8 billion), BMW said.

The automaker said it intends to accelerate the implementation of its organizational realignment, and as a result, will cut management functions ‌faster than announced.

The weakness in the Chinese market has been particularly tough for established premium automakers, which ‌face local customers increasingly going for cheaper home-grown brands, thereby removing a ⁠previously reliable profit stream.

($1 = 0.8935 ‌euros)

(Reporting by Abu Sultan ​in Bengaluru, Christoph Steitz in Frankfurt and Rachel More in Berlin; Editing by Vijay Kishore, Aurora Ellis and ‌Sanjeev Miglani)

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