By Rachel More
BERLIN, June 17 (Reuters) - BMW shares fell by more than 7% after the German automaker issued a profit warning late on Tuesday, with some analysts saying it signalled a broader strategic rethink.
The premium carmaker blamed ongoing weakness in China and the impact of the Iran war on prices and customer sentiment, with analysts at Deutsche Bank and Jefferies both saying the outlook cut was significantly larger than expected.
Wednesday's price fall took BMW shares to their lowest level
since November 2020 and dragged German rivals Volkswagen and Mercedes lower.
Alongside lowering its operating auto margin to 1% to 3%, from 4% to 6% previously, BMW said it would intensify cost-cutting, with a negative one-off in the second half of 2026.
The profit warning came after a change of CEO last month, when Milan Nedeljkovic took over from Oliver Zipse.
Jefferies analysts said the comments suggested the overhaul "will largely impact German operations and may address a global assembly footprint business model that is still largely centered on exporting ICE powertrain components from Germany".
BMW is not alone in rethinking its business model.
Volkswagen CEO Oliver Blume has warned that the traditional export model that buoyed Germany's auto industry for years is over, amid a major restructuring that has embedded Europe's largest carmaker more deeply in China.
For decades, European carmakers' margins were boosted by strong business in China, the world's largest auto market, but they have been overtaken by local brands in recent years.
Cut-throat competition in China has only intensified after a downturn in domestic car sales extended into an eighth consecutive month in May.
(Reporting by Rachel More; Additional reporting by Christoph Steitz; Editing by Miranda Murray)
