BMW Slashes Cash Flow Forecast Amid China Sales Slump
BMW has revised its automotive free cash flow forecast, now expecting over €2.5 billion instead of above €5 billion. This update, following a profit warning and sales decline in China, has cast uncertainty over Samvardhana Motherson International Limited's outlook. BMW also faces a delay in receiving substantial customs duty reimbursements from US and German authorities.
BMW's revised forecast comes amidst a challenging stock market landscape. The company's sales in China, a crucial market, have weakened, and it now expects a lower volume outlook for the region in the December quarter. Increasing competition from domestic EV manufacturers like BYD and Xiaomi is putting pressure on Western automakers' sales. BMW has also revised down its automotive EBIT margin forecast for 2025 to 5-6 percent.
The impact of these factors is evident in Samvardhana Motherson's recent financial performance. While the company's revenue from operations grew by around 5 percent YoY in Q1 FY26, net profit decreased by around 45 percent YoY. The uncertainty surrounding BMW's revised outlook and potential disruptions in demand and supply chains may further impact Samvardhana Motherson's revenue and stock market volatility in the coming months. The company's shares fell nearly 3 percent following BMW's revision of its 2025 forecast due to weaker China sales, higher tariffs, and dealer support costs.
BMW's revised forecast and the challenges it faces in China have implications for Samvardhana Motherson International Limited. The uncertainty in BMW's outlook and potential disruptions in demand and supply chains may impact Samvardhana Motherson's revenue and stock market volatility. Despite these challenges, Samvardhana Motherson continues to be a full system solutions provider with a diversified product portfolio, positioning it to navigate market uncertainties.
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