BMW Battles China Slump and Staff Reductions While Analysts Clash Over the Outlook
Published on 07/20/2026 at 13:43 | Redaktion boerse-global.de
The Munich automaker finds itself at an unusual crossroads where the investment community cannot agree on whether its battered stock is a bargain or a value trap. HSBC upgraded BMW shares to “Buy” on July 17 while simultaneously slashing its price target to €71 from €79 — a move the bank justified by arguing that the company’s dramatically lowered full-year guidance now reflects China risks more realistically. Just three days earlier, Deutsche Bank Research had reaffirmed its “Buy” rating with a far more ambitious target of €90, and JPMorgan stuck with “Overweight” and a €82 target in early July. The resulting spread of €71 to €90 underscores just how deeply opinions diverge on the manufacturer’s near-term trajectory.
The source of the turbulence is no secret. BMW was forced to cut its 2026 earnings outlook on June 16, slashing the expected EBIT margin in the automotive segment from a previous range of 4–6% down to just 1–3%. The culprit is a sharp acceleration in China’s sales decline, compounded by rising energy costs linked to the Middle East conflict. First-half delivery figures released July 10 make the pain tangible: the core BMW brand handed over 1,004,681 vehicles worldwide, a 6.2% drop, while the broader group including Mini and Rolls-Royce slid 4.2% to 1,156,742 units. Gains in the United States and Europe were insufficient to offset the drag from the world’s largest car market.
That drag has pushed the stock deep into negative territory. At Friday’s close of €58.40, the shares have lost 37.4% since the start of the year and 32% over the past twelve months — a stark contrast to the DAX’s 4% gain in the same annual period. Trading just 2.96% above the 52-week low of €56.72 hit on July 15, BMW is hovering near levels not seen since last December’s high. Technical indicators reinforce the gloom: the relative strength index stands at 36.4, signaling persistent selling pressure without yet crossing into oversold territory. The price-to-earnings multiple of 6.9 — lower than Mercedes at 7.1 but higher than Volkswagen’s 3.4 — has failed to lure bargain hunters.
Should investors sell immediately? Or is it worth buying BMW?
Management is responding with a sweeping operational overhaul. The supervisory board has appointed Dorothea von Boxberg, currently at Brussels Airlines, to take over the human resources portfolio from Ilka Horstmeier starting in September. Her immediate task: implementing a plan to cut up to 7,500 jobs, details of which will be presented at a works meeting scheduled for late July in Munich. The restructuring comes on the heels of another significant corporate action — the technical conversion of all preference shares into common stock at a 1:1 ratio, completed in late June to simplify the equity structure.
While BMW’s China woes are acute, the company has fared somewhat better than its German peers in relative terms. First-half data show sales in China fell 20% for BMW, versus 32% for Porsche and 28% for Mercedes; Audi was slightly better at 19%. A portion of the decline is attributed to a luxury tax adjustment Beijing made a year ago, lowering the threshold from 1.3 million yuan to 900,000 yuan (roughly €116,000). The VDA calls the change clearly negative for German manufacturers, and the CPCA reports a notable drop in demand for combustion-engine vehicles in the affected price bracket. BMW itself downplays the tax’s aggregate impact, noting that only a limited number of its models fall into that segment.
Not everyone is pessimistic about the product pipeline. JPMorgan’s Jose M Asumendi points to robust demand for the “Neue Klasse” architecture and an order book for the electric iX3 SUV approaching 100,000 units — a sign that next-generation EVs may provide a catalyst once they reach customers. Whether that optimism is justified will become clearer on July 30, when BMW publishes its half-year report and holds a webcast for analysts and investors. With margins slashed, a large-scale redundancy program just beginning, and a new personnel chief preparing to take charge, the second half of 2026 will test whether the current share price has already priced in the worst — or is preparing for more.
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