Strong sales in Germany and the United States are doing little to lift BMW’s stock, as a brutal profit warning overshadows record demand. While the Bavarian automaker notched a 19% jump in German premium registrations in June and a 13% rise in US second-quarter deliveries, the shares closed Friday at €60.66 — down nearly 37% since the start of the year and just shy of a 52-week low.
The contrast between the showroom and the trading floor could hardly be starker. In the US, BMW delivered roughly 103,000 vehicles in the second quarter, with light trucks — primarily SUVs — accounting for 54% of the total. When imported models such as the X1 and X2 are included, that share swells to over 64%. The X5, surprisingly, secured the top spot in sales, even though a model change is imminent. Across the Atlantic, BMW reclaimed the lead in Germany’s premium segment in June with nearly 26,100 new registrations, pushing both Mercedes and Audi into second place. On a half-year basis, BMW has now overtaken Stuttgart. Its Mini brand also shone with a near-60% sales leap.
Yet the production line’s success has not translated into shareholder returns. The culprit is profitability: BMW slashed its automotive margin guidance from a previous ceiling of 6% to a best-case scenario of just 3%. The causes are multifaceted. Demand in China has softened markedly, the Middle East conflict is disrupting operations, and internal restructuring costs are piling up. The resulting earnings shock has hammered the stock, which now trades well below its 50-day moving average of €71.09.
Should investors sell immediately? Or is it worth buying BMW?
Despite the margin squeeze, BMW is sticking to its capital return policy. Free cash flow in the automotive division is still expected to exceed €2.5 billion, and the company targets a payout ratio of 30% to 40%. Investors will get more clarity on the numbers in the coming weeks: an analyst call on July 10 is slated to provide initial details, followed by the full half-year results on July 30.
Meanwhile, the real test of BMW’s US performance may come when Audi and Mercedes release their detailed sales data in the coming days, allowing direct comparisons. For now, the Munich-based group finds itself in the odd position of dominating its home market and charging ahead in America, yet watching its shares drift near the floor.
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