German automajor BMW Group (BMW.L,BAMXF.PK,BAMXY.PK) announced that it has trimmed fiscal 2026 outlook, mainly citing negative development in China, impact of conflict in Middle East, and a one-time charge due to intensified and accelerated structural and efficiency measures.
The company added that the effects would contribute to a significant year-over-year decline in profit and free cashflow in the second quarter.
For the full year, the company now projects significant decrease in group profit before tax from the previous year, compared to previous estimate of moderate decrease.
Automotive Segment EBIT Margin is now projected in the corridor of 1 percent to 3 percent, lower than previous view in the corridor of 4 percent to 6 percent. Deliveries in the segment now would slightly decrease from the previous year, while the company earlier projected it to be flat.
The company now expects Automotive Segment ROCE in the corridor of 1 percent to 5 percent, compared to 6 percent to 10 percent expected earlier.
CO2e-emissions Scope 3 will be at previous year's level, while the previous view was a slight increase.
Meanwhile, the dividend payout ratio of 30 percent to 40 percent of net income attributable and the ongoing share buyback program both remain unchanged.
The BMW Group expects the Automotive Free Cashflow to be above 2.5 billion euros.
According to the firm, the negative development in the Chinese automotive market accelerated further in the second quarter, mainly for non-electric vehicles.
The China Passenger Car Association has repeatedly revised its annual market forecast downward, resulting in intensified competition in China and across the Asia-Pacific region.
BMW Group noted that the sales decline in these regions offset positive sales volume development in Europe and the U.S.
In addition, the firm now projects higher impact of the conflict in the Middle East on its global business than expected earlier. Energy prices remain elevated and affect the firm's cost structures, and the lack of stability due to the conflict is negatively impacting consumer sentiment across markets globally.
BMW Group added that it expects a one-time negative impact on earnings in the second half of 2026 due to its plan to intensify and accelerate ongoing cost reduction initiatives through further structural and efficiency measures. The effects are projected to be visible in the coming years.
The half-year report is scheduled to be published on July 30.
On the XETRA in Germany, BMW shares closed Tuesday's trading at 67.90 euros, down 0.64 percent.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.