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BMW has cut its forecast for its car division’s operating margin to near break-even, citing weak demand in China and higher-than-expected restructuring costs.
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BMW has cut its expected operating margin for its car division to between minus 0.5% and plus 0.5% this year, down from a previous forecast of 1% to 3%, as weak demand in China adds to pressure on the German carmaker.
The company has lowered its outlook for the second time in five months. It is also accelerating a restructuring programme, with management roles being reduced more quickly than previously announced.
BMW said the job cuts were progressing faster than expected, increasing the cost of severance payments. The company is due to report quarterly results on Wednesday.
The downturn in China, the world’s largest car market, and strong competition are affecting BMW and other carmakers. Volkswagen and Mercedes-Benz have also issued profit warnings this year.
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