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Investing.com - Mercedes-Benz Group shares fell 3.1% in Frankfurt trading on Wednesday as investors drew direct comparisons to BMW, whose dramatic guidance cut sent the Munich-based automaker's stock down as much as 8% and triggered a broad sell-off across German premium auto names.
BMW slashed its 2026 automotive EBIT margin guidance to 1–3%, down sharply from the prior forecast of 4–6%, and said group pretax profit would fall significantly — defined as more than 15% — versus an earlier expectation of only a moderate decline.
The company blamed an accelerated downturn in China, particularly for combustion-engine vehicles, and the ongoing Iran war, which it said has raised energy costs and dampened global consumer sentiment beyond its initial assumptions. Volkswagen shed roughly 2% in sympathy, underscoring how deeply the warning resonated across the sector.
Barclays analysts were blunt in their assessment of the fallout for Mercedes. "We think MBG will heavily suffer on the cross-read," the bank said.
The logic is straightforward: Mercedes shares the same China exposure and Middle East sensitivity as BMW, making it a natural proxy for investors seeking to reduce their weighting in European premium autos. Neither company has announced any guidance update of its own in response to Wednesday's events; Mercedes is currently scheduled to report second-quarter results on July 30, 2026, which will be the first formal opportunity for management to address how its own China trajectory compares with BMW's.
BMW's situation is drawing unusually sharp criticism from the analyst community. Jefferies and Deutsche Bank both described the guidance revision as significantly larger than expected. Deutsche Bank warned that the stock "could have a hard time performing" until BMW presents its new strategic plan at a capital-markets day planned for September, adding that "after three profit warnings in the last two years, all largely China-related, BMW's nimbus of the 'steady Eddy' in Autos clearly took a hit." The new guidance implies roughly €3 billion in reduced operating profit versus prior forecasts.
BMW Chairman Milan Nedeljković acknowledged the severity of the situation in a statement published June 16, saying: "We will adapt our current structures and processes to the drastic downturn in market conditions. It is our entrepreneurial responsibility, therefore, to significantly intensify and accelerate our ongoing measures. It's all about speed and efficiency."
The damage extends beyond the carmakers themselves. A Reuters survey published Wednesday showed that German automotive suppliers expecting conditions to worsen over the next year now outnumber optimists, with investment and hiring already falling. That deterioration in the supplier base suggests the structural headwinds facing German auto are not limited to demand in China but are feeding back into the domestic industrial ecosystem.
For Mercedes investors, the immediate question is whether the company will be pulled into the same downward revision cycle. BMW's latest cut is its third China-related profit warning in two years, and Barclays' cross-read concern reflects a broader market view that the challenges facing premium German automakers, fierce local EV competition in China, weakening combustion-engine demand, and geopolitical cost pressures from the Iran war, are sector-wide rather than company-specific.
The next hard catalyst for BMW specifically is its Q2 2026 earnings release on July 30, where consensus forecasts call for earnings per share of €2.50 on revenue of €33.6 billion.
