German BMW lowers its financial forecast for 2026 and will "significantly strengthen and accelerate" cost-cutting measures.

German carmaker BMW downgraded its financial forecasts for 2026 on Tuesday, as key markets accelerated their decline and the Iran war had an impact. BMW stated that the conflict has hit consumer confidence and raised energy costs. These statements indicate that the European automotive industry, already deeply affected by fierce competition in Asia and weak domestic demand, is also extremely sensitive to overseas situations. BMW stated that it currently expects the profit margin of its core automotive business sector in 2026 to be between 1% and 3%, lower than the previous forecast of 4% to 6%, and expects core delivery volumes to slightly decrease, instead of remaining stable as previously expected. The company expects a significant decline in pre-tax profit, which, according to BMW's definition, means a decrease of more than 15%, compared to the previously expected mild decline. BMW's stock price fell by 0.64% on Tuesday in the Frankfurt market. BMW CEO Milan Nedeljkovi stated that the company will "significantly strengthen and accelerate" cost-cutting measures as a result, and added that the company will "adjust existing structures and processes to cope with the rapidly deteriorating market conditions." BMW did not disclose specific details, only stating that these measures will result in a one-time negative impact in the second half of 2026.