BMW Slashes 7,500 Roles and Halves Margin Forecast as China Rout Deepens
Published on 06/18/2026 at 15:23 | Redaktion boerse-global.de
Just a day after issuing a stark profit warning, BMW’s new chief executive Milan Nedeljkovic is wielding the axe. The Munich-based automaker plans to cut up to 7,500 positions worldwide — roughly 5% of its total workforce — as it scrambles to contain the damage from a collapsing Chinese market. The reductions will come primarily through natural attrition and early retirement packages, with compulsory redundancies largely ruled out.
The restructuring follows a dramatic revision of the company’s near-term earnings outlook. BMW now expects its core automotive operating margin to come in between 1% and 3% for the current year, down sharply from the 4% to 6% target set just months ago. The downgrade has sent shockwaves through the stock. On Thursday, shares plunged 4.16% to €59.50, a new 52-week low that pushed the year-to-date loss to nearly 38%. Earlier in the session the stock had briefly steadied around €60.80 before the selling accelerated.
The root cause of the misery is China, where demand for combustion-engine models has evaporated. Adding to the pain, elevated energy costs and supply-chain disruptions linked to the Middle East conflict have compounded the pressure. BMW’s next-generation electric platform, the “Neue Klasse,” is also feeling the pinch from the prolonged slowdown in Asia.
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Free cash flow is expected to hold at roughly €2.5 billion, and management has reiterated its pledge to maintain a payout ratio of 30% to 40%. That commitment has done little to calm investors, who have watched the market value of the automaker sink close to its net cash pile.
The reaction from the sell-side has been swift and brutal. Goldman Sachs slashed its price target from €107 to €84 but kept a buy rating, citing the company’s strong net liquidity. Berenberg downgraded the stock to “hold” and cut its fair value to €69. Jefferies trimmed to €70, with analyst Philippe Houchois suggesting the group may need to conduct a fundamental review of its entire business model. JPMorgan lowered its target to €82, calling the warning a wake-up call for Europe’s entire auto sector. Deutsche Bank reduced its mark to €90, pointing to unanswered questions from the latest analyst call. Barclays put the stock at “underweight” with a target of €82.50.
On the charts, the technical damage is severe. The stock now trades nearly 22% below its 50-day moving average, and the relative-strength index has sunk to 17.7 — deep in oversold territory. Such readings have historically preceded short-term bounces, but the fundamental headwinds show few signs of abating.
Nedeljkovic, who took the helm just weeks ago, faces the difficult task of charting a way forward. The next major milestone arrives on July 30, 2026, when BMW is scheduled to publish its half-year report. Investors will be looking for concrete details on the cost-saving programme and a credible strategy for reviving growth in China. Until then, the auto maker is locked in a race to plug the margin gap before the market pulls the plug on its valuation altogether.
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