BMW's Profit Warning Cuts Cash Flow in Half as US Growth Fails to Offset China Slide
Published on 07/06/2026 at 04:03 | Redaktion boerse-global.de
BMW's cash engine is sputtering. The German automaker now expects free cash flow of just €2.5bn this year, roughly half the original target, after slashing its full-year margin forecast. The dramatic revision has driven shares to within a hair's breadth of their 52-week low, closing Friday at €60.66 – a year-to-date decline of nearly 37 percent.
The profit warning centres on the group's automotive division, where the EBIT margin is now projected at just one to three percent for 2025. Management had previously aimed for up to six percent. The primary culprit is China, where sluggish demand for combustion-engine vehicles has hammered sales. Adding pressure are rising energy costs linked to the Middle East conflict, which have pushed operational expenses higher.
American demand tells a different story
While China weighs on the bottom line, BMW's North American operations are firing on all cylinders. Second-quarter US sales jumped 13.0 percent year-on-year to 102,713 units, with both passenger cars and SUVs posting gains. The BMW X5 led the charge, retaining its spot as the brand's bestseller in the region even as the model approaches a generational switch. The incoming fifth-generation X5 will offer five distinct drivetrain options – a first for the lineup.
For the first half, BMW brand sales in the US rose 4.7 percent from a year earlier, though a weak start to the year tempered the pace. Including the Mini brand, which recorded a slight dip to 7,456 vehicles in the second quarter, the group’s overall US sales edged up 3.9 percent in the six-month period.
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Asian rivals pile on the pressure
The disconnect between strong US performance and mounting Asian headwinds is stark. Chinese automakers, led by aggressive newcomers like Xiaomi, are flooding European markets with low-priced models, intensifying a price war that is squeezing margins across the German auto industry. BMW's domestic peers are also feeling the heat: Volkswagen is reportedly mulling job cuts that could affect up to 100,000 positions worldwide, while Porsche and Mercedes-Benz are preparing their own cost-reduction programmes.
BMW management acknowledged that modest growth in Europe and the US is nowhere near sufficient to compensate for the steep decline in its core Chinese business. The company’s historic podium finish at the Suzuka endurance race over the weekend offered a brief moment of cheer, but the celebration was short-lived as the profit warning dominated headlines.
A model offensive and upcoming milestones
The automaker is banking on a sweeping product renewal to reverse the momentum. Central to this strategy is the "Neue Klasse" platform, which will underpin dozens of new or refreshed models over the next two years. The flagship electric vehicle, the iX5, is slated to debut in 2027 with next-generation battery architecture.
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Investors will get a clearer picture of how the numbers stack up in the coming weeks. BMW has scheduled an analyst call for July 10 to discuss the current business situation, followed by the full half-year report on July 30. The market will be watching closely to see whether the US sales surge can meaningfully offset the drag from Asia – or whether the shares will remain trapped near the lows.
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