BMW Cuts Outlook Again
The German automaker's net profit fell to 1.45 billion euros in the third quarter as it deepens restructuring efforts, citing higher severance payments and production ramp-up expenses
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BMW now expects the car division’s operating profit margin to be between -0.5% and +0.5% for the full year.
Story published. The German automaker's net profit fell to 1.45 billion euros in the third quarter as it deepens restructuring efforts, citing higher severance payments and production ramp-up expenses
BMW has cut its automotive outlook for the second time this year, citing higher-than-expected severance payments and expenses related to production ramp-up. The company's net profit for the July-September quarter fell to 1.45 billion euros, a significant decline from the previous year.
Revenue for the quarter declined nearly 6% to 30.45 billion euros, with global deliveries falling 6.3% during the period. The decline was particularly pronounced in China, where BMW's vehicle deliveries plunged 24.8% in the third quarter.
In an effort to regain market share in China, BMW is shifting more of its supply chain for locally sold vehicles to the country. This move is part of the company's broader restructuring efforts, which have resulted in its second profit warning this year.
The company's expenses related to production ramp-up and severance payments are expected to continue to weigh on its core automotive business, potentially pushing it into an overall loss in 2026. This has led to a decrease in investor confidence, as the company navigates a challenging period in the automotive industry.
## What happens next The restructuring efforts at BMW are likely to continue, with the company seeking to reduce costs and improve efficiency in its operations. The shift in supply chain for locally sold vehicles in China is a key part of this strategy, as the company seeks to regain market share in a critical region.
## Why it matters The decline in BMW's net profit and revenue is a significant concern for investors, as the company navigates a challenging period in the automotive industry. The restructuring efforts, while necessary, are likely to result in short-term pain for the company, with expenses related to production ramp-up and severance payments expected to continue to weigh on its core automotive business. The success of BMW's efforts to regain market share in China will be critical to its long-term success, as the company seeks to remain competitive in a rapidly changing industry.
