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BMW Tumbles to 5-Year Low as Iran War, China Slowdown Bite
BMW shares fell 6.5% to a 5-year low after cutting 2026 profit guidance, citing Chinese demand drop and Iran war costs. Deutsche analysts said the call left more questions than answers.
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BMW shares hit their lowest level in more than five years on Wednesday after the German carmaker slashed its 2026 profit outlook, blaming weaker Chinese demand and higher energy costs tied to the Iran war. The stock fell 6.5%.
In a Tuesday statement, BMW said “positive volume developments in Europe and the USA cannot compensate for the sales decline in China and Asia Pacific.” The company added that elevated energy prices from the war are weighing on costs and “negatively impacting consumer sentiment across markets around the world.” Pre-tax profit is now expected to fall “significantly,” the firm said.
Deutsche analysts said in a note Wednesday that BMW’s conference call left them with “more questions than answers.” They voiced concern about the lack of a “comprehensive update on the company’s structures and costs.”
Citi analysts cut their China sales assumptions by more than 50,000 units and forecast total sales below 500,000 by year-end. “With no obvious positive equity narrative, with full-year earnings still under downward pressure, with a structural thematic negative industry trend, with continued industry-punishing EU regulations, and with a limited number of investors in European value names, we think BMW’s undervaluation may persist,” the analysts said.
The profit warning dragged down the broader European auto sector. Volkswagen and Mercedes-Benz shares also fell. Volkswagen in April reported weaker-than-expected first-quarter profit, citing higher U.S. tariffs and competition from Chinese car brands. CEO Oliver Blume cited “wars, geopolitical tensions, trade barriers, stricter regulations, and intense competition” as headwinds.
European carmakers continue losing ground to Chinese rivals. China has expanded its EV footprint across Europe, the U.K., Asia and Australia, exporting millions of competitively priced vehicles and building factories. The sector is increasingly turning to defense manufacturing. Ineos Automotive and Daimler Truck this week announced plans to produce military vehicles.
For more on the market impact of geopolitical shocks on auto stocks, see our stock market analysis.