Net profit at premium carmaker BMW fell over a third in the second quarter, the firm said Thursday, as intense Chinese competition shakes German automotive giants.
Net profit in the three months to the end of June came in at 1.2 billion euros ($1.4 billion), BMW said, a fall of almost 35 per cent on this time last year.
That was BMW’s lowest quarterly profit since late 2024, when faulty brakes fitted to vehicles ended up costing the carmaker hundreds of millions of euros.
Challenging conditions in China — where a sluggish economy and cutthroat competition have hit automakers — drove the result, BMW said.
Even as vehicle deliveries rose slightly in Europe and the United States, they plunged 30.2 percent in China over the quarter.
“Competition in the global automotive market has sharpened noticeably,” BMW finance boss Walter Mertl said, adding that BMW would let an unspecified number of people go to bring costs down.
“We are intensifying and accelerating our efficiency measures,” he said. “Our goal is to reduce complexity and establish a sustainably lower cost base.”
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A BMW source told AFP on Wednesday that it would offer severance to almost half its German employees with a view to cutting about 8,000 jobs by the end of 2027.
Other German carmakers have also looked to cut overheads as collapsing sales in China have started to look less like a blip and more like a new normal.
Mercedes-Benz also has a voluntary redundancy program, and Volkswagen, which apart from its namesake also operates premium brands like Audi and Porsche, is weighing up to 100,000 job cuts across the group, including 50,000 that have already been agreed.
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BMW confirmed its adjusted guidance for the year, saying it expects a “significant decrease” in profit.
The owner of the Mini and Rolls-Royce brands issued a shock profit warning last month and said its margin at its core cars business could this year be as low as one percent, blaming weakness in China.
AFP
