Live Markets: More auto profit warnings may be coming

Bayerische Motoren Werke Aktiengesellschaft

06/07/2026 11:27

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MORE AUTO PROFIT WARNINGS MAY BE COMING
BMW's BMWG.DE recent profit warning may not be the last from Europe's embattled auto sector.
In a preview of second-quarter earnings, UBS says it sees a growing risk of further warnings from European carmakers, particularly German ones, as weak Chinese demand and mounting competitive pressure weigh on profitability.
The Swiss bank expects China's light vehicle market to have contracted about 20% in the second quarter, while Chinese brands continue to gain ground in Europe.
According to UBS, Chinese OEMs' market share in Europe was 11% in the period, up from 4% in the same quarter last year.
After BMW's warning, UBS says it expects "more risk of profit warnings from German OEMs on restructuring charges" and also sees downside risk to the underlying performance of Europe's mass-market carmakers.
Volkswagen VOWG.DE, which sources say is considering shutting four German factories and ramping up job cuts to as many as 100,000, could be among the companies under pressure. 
UBS forecasts operating margin at 4.6% for Volkswagen and says full-year guidance could be cut if the group takes a restructuring charge in the second half, which it estimates could reach the mid- to high-single-digit billions of euros. VW reports on July 24 with a pre-close call due on July 13.
Mercedes-Benz MBGn.DE is seen delivering a car margin at the low end of its 3-5% target range, while a reduction in its medium-term margin guidance won't surprise, says UBS. Mercedes holds its pre-close call on July 14, before earnings on July 28.
More reading on autos: China leads record car launches, testing global automakers
(Danilo Masoni)
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