BMW Group has lowered its 2026 margin and return targets for its Automotive segment. The company says one-off costs from widened portfolio and structural measures will weigh on fourth-quarter earnings. It also says demand for its Neue Klasse models is strong enough to retire older vehicle and technology generations sooner than planned, and that underlying performance remains solid.

The Board of Management of BMW AG has revised its full-year guidance for the 2026 financial year. The change follows a decision to expand and step up the group’s portfolio and structural measures. BMW says operating performance held up in the third quarter. However, the measures it has approved will create a non-operating hit to earnings in the Automotive segment in the fourth quarter.

Lower margin and return corridors

The two headline profitability targets for the Automotive segment have been cut:

  • EBIT margin: now expected between -0.5% and +0.5%, down from the previous corridor of 1–3%. Before the structural and portfolio measures, BMW still expects the margin to come in above 2.0%.
  • Return on capital employed (RoCE): now expected between -1% and +1%, down from 1–5%.

Cash generation is unchanged. BMW still expects Automotive free cash flow to exceed €2.5 billion in 2026, which the company says shows its operating business remains stable.

Deliveries, EV share and emissions

BMW has also revised several non-financial targets:

  • Automotive deliveries: now expected to fall moderately year on year (previously a slight decrease).
  • Share of fully electric cars in deliveries: now expected to rise slightly (previously at the prior year’s level).
  • Scope 3 CO2e emissions from the supply chain and use phase: now expected to fall slightly (previously at the prior year’s level).
  • Motorcycle deliveries: now expected to fall slightly (previously at the prior year’s level).

Neue Klasse demand drives an earlier phase-out

BMW links the portfolio measures directly to the Neue Klasse. According to the company, demand for the new models has stayed high, so it added production shifts early on. Because production is ramping up faster, BMW can start phasing out older vehicle and technology generations sooner. This includes selected models that use its Gen5 battery technology.

The manufacturer says the Neue Klasse and its technology clusters, including Gen6 technology, will help improve profitability in the coming years through innovation and better cost efficiency.

Faster organisational restructuring

BMW also plans to build on its existing workforce restructuring programme. It wants to extend the organisational and process realignment faster and more widely than originally planned. As one example, the company says it will cut management functions sooner than previously announced.

What it means

The revised guidance separates one-off restructuring costs from BMW’s underlying business. The unchanged free cash flow target and the margin of over 2.0% before the measures point to stable day-to-day operations. The lower headline figures reflect the cost of moving faster to the Neue Klasse. For buyers, the main takeaway is that some older models, including selected Gen5-battery models, are due to leave the line-up earlier than planned. BMW has not yet said which ones.

Facts: BMW Group 2025 key figures

  • Passenger vehicles sold: 2.46 million
  • Motorcycles sold: more than 202,500
  • Profit before tax: €10.2 billion
  • Revenues: €133.5 billion
  • Workforce (31 December 2025): 154,540 employees
  • Production sites: over 30 worldwide
  • Sales network: more than 140 countries

Full details will appear in BMW Group’s Q3 Report, due on 4 November 2026.

Source: www.linkedin.com