Azernews.Az

by Alimat Aliyeva

BMW AG shares on the Frankfurt Stock Exchange fell sharply on Wednesday, dropping around 7% after the German automaker issued a profit warning, citing weakening demand in China and broader economic uncertainty linked to escalating tensions in the Middle East, including the Iran conflict, AzerNEWS reports, citing foreign media.

The company announced on Tuesday that it would intensify cost-cutting measures alongside a downward revision of its financial outlook. BMW reduced its projected automotive operating margin from 4–6% to a much lower range of 1–3%. According to the company, combined pressure from weaker sales, pricing challenges, and deteriorating consumer sentiment has significantly impacted its performance, forcing a sharper-than-expected adjustment to forecasts—one that analysts say signals growing strain in the premium automotive segment.

Following the announcement, BMW shares dropped as much as 7.57% at 9:12 a.m. CET, trading at approximately €62.82 per share.

Market analysts note that China remains one of the most critical battlegrounds for European luxury carmakers, and even small shifts in demand there can have outsized effects on earnings. At the same time, rising geopolitical risks and energy price volatility are increasing uncertainty for global automakers, particularly those with high exposure to international supply chains.

Interestingly, industry observers also point out that BMW’s cost-cutting push may accelerate its shift toward electrification and software-driven vehicles, as legacy combustion-engine margins continue to shrink. This could further intensify competition with both traditional rivals like Mercedes-Benz and fast-growing Chinese EV manufacturers.