BMW cuts 2026 car margin outlook again amid job-cut costs

BMW lowered its 2026 profit forecast on Tuesday, November 3. The carmaker now expects its automotive EBIT margin to land between negative 0.5% and positive 0.5%, down from the 1% to 3% range it had given before. Bloomberg reported that this is the second cut in five months, as the Munich-based company widens its restructuring while demand for its cars in China stays weak.bloomberg.com

The company also lowered its target for return on capital employed in the automotive segment to a range of -1% to +1%. It kept its forecast for automotive free cash flow above €2.5 billion, Investing.com reported. BMW blamed the change on an expansion of its portfolio and structural measures. It now expects a moderate decrease in automotive deliveries this year and a slight rise in the share of fully electric cars.investing.com

Restructuring costs arrive sooner

German news agency dpa reported that job-cut costs are a main reason for the lower forecast, according to news.de. BMW opened a voluntary severance program in early October. So many workers signed up that the company closed it after less than three weeks. That means much of the cost will likely be booked in the current fourth quarter. BMW had earlier estimated the job-reduction program would cost about €1 billion in total. The company plans to give more detail when it reports third-quarter results on Wednesday morning, November 4.news.de

TipRanks summarized BMW's announcement this way: the company has begun portfolio and structural measures meant to make it more competitive, and expanding them will put more pressure on near-term results.tipranks.com

A year of downgrades

On June 16, BMW had already cut its automotive margin forecast to 1%–3% from 4%–6%, and lowered its delivery outlook to a slight decline, according to the company's ad hoc disclosure. The automotive margin fell to 2.3% in the second quarter, down from 5.4% a year earlier. BMW's half-year report said tariffs cut about 1.25 percentage points from the margin. It also said the workforce restructuring could cost up to another 1.25 points this year.bmwgroup.com+1

At its Capital Market Day in late October, BMW set a target of a 3% to 5% automotive margin by 2028. It said it aims to return to its long-term range of 8% to 10% by the start of the next decade, and that decisions on more measures are expected by spring 2027, according to the BMW Group. Its presentation included plans to cut senior leadership positions by 20% and to raise automotive free cash flow above €5 billion by 2028.bmwgroup.com+1