Bayerische Motoren Werke Aktiengesellschaft

Mercedes-Benz Group AG sold only 1,153 units in China in the first half of 2026, a fraction of the more than 80,000 similarly priced SU7 sedans that Xiaomi Corp. delivered in the same period. The performance echoes the challenges faced by BMW AG, Volkswagen AG, and Porsche AG in China, where all reported second-quarter sales declines of at least 30%, worse than the overall market's drop.

Japanese, Western, and Chinese automakers are facing sales headwinds in China's auto market. In the first half of 2026, Honda's China sales fell 34.6 percent year on year, Toyota Motor dropped 17.1 percent, and Nissan Motor declined 15 percent, with Japanese brands posting double-digit decreases. European players Volkswagen, Mercedes, and BMW saw drops of 20 to 30 percent, while US automaker General Motors slipped 6 percent. Chinese manufacturers also saw domestic sales fall below the previous year for the first time in two years, with EV leader BYD down 16 percent and Li Auto down 5 percent. A rapid expansion of production capacity for new energy vehicles, including EVs, has led to oversupply, pushing factory utilization rates well below the 80 percent breakeven level. The strain of overproduction is spilling over into exports, with so-called zero-kilometer used cars, where new vehicles are shipped overseas as used cars, now accounting for over 90 percent of used car exports, prompting authorities to question BYD and others. NIO CEO William Li expressed a sense of crisis, saying China's auto industry has entered its most brutal phase, as the state-led push to nurture the EV industry reaches a crossroads.

BMW reported a nearly 35 percent drop in second-quarter net profit to 1.2 billion euros, its lowest quarterly profit since late 2024, and confirmed plans to cut about 8,000 jobs in Germany by the end of 2027. The carmaker, which also owns Mini and Rolls-Royce, said vehicle deliveries plunged 30.2 percent in China amid a sluggish economy and fierce competition, even as sales rose in Europe and the United States. A BMW source told AFP the company would offer severance to almost half its roughly 85,000 permanent German employees. CEO Milan Nedeljkovic said BMW is preparing for rising sales from Chinese competitors in Europe, while finance boss Walter Mertl said the company is accelerating efficiency measures to establish a sustainably lower cost base. BMW confirmed its adjusted guidance, expecting profit to fall over 10 percent in 2026.

Germany’s automotive giants are grappling with severe economic headwinds after first-half sales tumbled worldwide, especially in key markets like China. Many companies are now racing to adapt through aggressive cost controls, business restructuring, and thousands of job cuts to shore up their finances. Porsche reported total deliveries of 122,306 vehicles in the first half of this year, down 16.5 percent from the same period last year. Sales revenue fell 5.1 percent to 17.23 billion euros, but operating profit rose 33.9 percent thanks to strict cost management. The company is preparing to cut around 5,000 additional positions, which together with earlier plans will bring total job reductions to about 9,000, or nearly 20 percent of its workforce. BMW delivered a total of 1.15 million vehicles in the first six months, a 4.2 percent decline year-on-year. Meanwhile, Volkswagen, Porsche’s parent company, sold around 4 million vehicles in the first half, down 8.4 percent, causing operating profit to drop 11.6 percent to 5.9 billion euros. Arno Antlitz, Volkswagen’s Chief Financial Officer and Chief Operating Officer, said the group’s operating margin of 3.8 percent is too low and called for additional measures. The business confidence index for the German auto industry, compiled by the ifo Institute, fell to minus 21.4 points in June from minus 20.7 points in May. Hildegard Müller, president of the German Association of the Automotive Industry, said the sector needs comprehensive reform to return to growth. Amid the gloom, the electric vehicle market remains a bright spot, with new registrations of battery electric and plug-in hybrid vehicles in Germany surging 60 percent year-on-year in June to 116,300 units.

European luxury brands and automakers are signaling diverging fortunes amid consumer weakness in China. BMW, Audi, Volkswagen, and Porsche are struggling as Chinese consumers opt for cheaper, better domestic alternatives, while heritage luxury names like LVMH and Kering are holding up better. Ferrari and Rolls-Royce have seen China sales fall but not as sharply as mass-premium auto brands. Hermez said price hikes in 2027 are going to be smaller than this year, which weighed on its shares, while Kering's 1% second-quarter revenue rise was enough to boost its stock.

Thousands of Audi workers demonstrated on Wednesday against the possible closure of the German automaker's Neckarsulm plant as parent Volkswagen pushes ahead with a group overhaul expected to include tens of thousands of job losses. About 6,000 people took part, according to the works council, at the site that employs roughly 15,000 workers producing the A5, A6, A8 and the all-electric e-tron GT. Workers demanded clarity from Volkswagen, whose CEO Oliver Blume has warned Neckarsulm is among four German plants that could close after 2030 if no alternative solution is found. The protest came as rival BMW announced thousands of job cuts, adding to pressure on Germany's auto industry from high costs, growing Chinese competition and U.S. tariffs. Local mayor Steffen Hertwig warned that closing Neckarsulm would be a disaster with far-reaching consequences for the southwestern state of Baden-Wuerttemberg.

German automaker BMW announced on the 29th that it will cut thousands of jobs in Germany by the end of 2027 through a voluntary redundancy programme. The cuts will target management and development departments, while production will be excluded. According to sources, around 8,000 of the company's 150,000 global workforce are expected to go. In the German auto industry, Volkswagen and Mercedes-Benz have also unveiled large-scale job reduction plans amid the shift to electric vehicles, competition with China, and US tariffs.

U.S. Central Command intercepted multiple ballistic missiles launched toward American military targets in the Middle East during a surprise attack that began at 5:45 p.m. ET, keeping geopolitical risks and energy markets in focus. Meta CEO Mark Zuckerberg said the U.S. should not block advanced Chinese AI models to gain an advantage in the global AI race, arguing that restricting access would not be an effective strategy. South Korea’s finance minister apologized after regulators allowed retail investors to trade single-stock leveraged ETFs, resulting in widespread losses, and financial regulators are now considering limiting access to professional investors. Beijing OceanBase Technology, the database software company backed by Alibaba founder Jack Ma, is seeking to raise between 2 billion yuan and 3 billion yuan in a Series A funding round to accelerate its AI strategy. BMW plans to eliminate several thousand positions in Germany through a voluntary redundancy program by the end of 2027, with its workforce expected to shrink by roughly 8,000 employees as it responds to weaker demand in China.

Major German carmakers saw sharp quarterly sales declines in China as domestic demand weakened and competition heated up. Volkswagen, Mercedes-Benz, BMW and Porsche reported China sales for the April-to-June quarter plummeting between 30% and 41% compared with the same period a year ago, according to company data released over the past week. For the first half of this year, they all reported a more than 20% year-on-year drop in China, squeezing overall profits. Volkswagen group deliveries in China fell 36.6% during the quarter to 424,300 vehicles, dragging down its global sales to an 8.6% decline even as deliveries increased in Europe and the Americas. The Wolfsburg-based auto group said it would slash its model lineup by up to half after the latest sales declines, while Porsche called China's market environment challenging and Mercedes-Benz cited a significantly weaker overall market and macroeconomic environment.

Zacks Investment Research added three stocks to its Zacks Rank #5 (Strong Sell) List today. Bayerische Motoren Werke Aktiengesellschaft saw its current-year earnings consensus estimate revised 8.2% downward over the last 60 days. DXC Technology Company's estimate was revised 18.2% downward, and Dynavax Technologies Corporation's estimate was revised 50% downward over the same period.

Citi maintained a Neutral rating on BMW, arguing that persistent weakness in China and a lack of clear earnings catalysts are likely to keep the shares range-bound despite an increasingly attractive valuation. The brokerage expects BMW's automotive EBIT margin guidance of 1% to 3% for fiscal 2026 to remain well below long-term targets, with vehicle sales in China forecast to drop from a peak of about 800,000 units to roughly 500,000 this year and further to between 300,000 and 350,000 units by 2030. Earnings from China, which peaked at around €5 billion in 2023, are expected to fall below €1 billion this year amid rising competition from domestic electric vehicle makers, geopolitical tensions, and ongoing pricing pressure. Attention is turning to BMW's Capital Markets Day in September, when new Chief Executive Milan Nedeljkovic is expected to outline the long-term strategy, with investors likely to focus on cost reductions and restructuring measures. Citi estimates BMW may need as much as €3 billion in cost savings and portfolio improvements to lift automotive EBIT margins toward a 6% to 8% range over the medium term, and argues that legacy automakers should focus on cash generation and shareholder returns rather than growth.

BMW has slashed its annual profit margin forecast from 4-6% to just 1-3%, citing waning demand in China and repercussions from military action in Iran. JPMorgan analysts called the cut 'radical' and said it should serve as 'a wake-up call' for the entire auto industry. The German carmaker is rolling out cost-optimization measures including cutting 5% of its workforce, and its shares hit a six-year low on the news. BMW and its European peers have seen profit margins fall from double-digits in 2021-2023 to between 1% and 7.5% for 2026, as Chinese competitors offer more enticing price points, advanced tech features, and lower manufacturing costs. The company also shuttered one of its Chinese dealerships in March following more than 50 closures in 2025, and reported a 10% year-over-year decline in Chinese sales volumes for passenger sedans in the first quarter.

The DAX fell 231 points, or 0.93 percent, to 24,763 on Friday, reversing the previous session's 1 percent rally. Infineon Technologies tumbled 3.6 percent amid uncertainty in the global technology sector, while automakers BMW and Mercedes Benz each fell around 1 percent. Online fashion retailer Zalando plunged 5.2 percent after Germany's financial regulator BaFin launched an investigation into the company's 2025 financial statements, alleging a transaction related to the acquisitions of About You might have been omitted.

Bayerische Motoren Werke AG has slashed its full-year 2026 outlook, citing worsening conditions in the Chinese automotive market and economic uncertainty from the Middle East conflict. The automaker now expects its automotive segment EBIT margin to be between 1% and 3%, down from an earlier forecast of 4-6%, and lowered its automotive segment ROCE outlook to 1-5% from 6-10%. BMW Group now anticipates a significant year-over-year decline in profit before tax, a more severe drop than the moderate decrease previously projected, while vehicle deliveries are expected to decline slightly instead of remaining stable. The company maintained its automotive free cash flow target of more than €2.5 billion and reaffirmed its dividend payout policy of distributing 30-40% of net income attributable to BMW shareholders.

Mercedes-Benz Group is rolling out deeper cost-cutting measures and accelerating artificial intelligence adoption across its workforce, targeting 70% AI integration among staff. The move aims to address margin pressure and maintain competitiveness against global peers such as BMW, Audi, and Tesla. The company's share price is around €45.235, down 27.0% year to date, with a 9.7% decline over the past month and a 7.5% drop over the past week. The AI push is expected to support areas like procurement, engineering, and customer support, potentially lowering unit costs and reinforcing the premium-brand focus. However, execution risks remain, including potential disruption to operations, strain on labor relations, and the challenge of balancing cost cuts with necessary investments in electrification and software.

BMW Group is preparing to enter discussions with employee representatives as the German automaker contends with a fresh profit warning, weakening China sales and rising costs tied to the Iran war. According to a Reuters report, the carmaker and its general works council are expected to start talks in the coming weeks, though the works council did not outline specific measures. BMW has been reducing its workforce through natural attrition, with employee numbers declining slightly in 2025, and it expects that trend to continue this year. By the end of 2026, BMW is targeting a reduction of up to 5% of its global workforce, which based on its current headcount of just under 155,000 employees could amount to around 7,700 fewer positions worldwide. Earlier this month, BMW lowered its financial outlook for 2026, now expecting its automotive segment EBIT margin to be between 1% and 3%, compared with previous guidance of 4% to 6%, and group profit before tax to decline significantly from the previous year.