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BMW issues second profit warning as it counts cost of 8,000 job cuts
BMW issued a profit warning on Wednesday, cutting its 2025 automotive margin guidance to between -0.5% and 0.5% as it absorbs restructuring costs including 8,000 job cuts in Germany and falling China sales.
Margin guidance slashed for 2025
BMW has issued its second profit warning in a year, blaming the costs of a restructuring programme that includes significant job losses and competition from China. The carmaker cut its 2025 profit margin guidance to between -0.5% and 0.5%, from an expectation of 4-6% set at the beginning of the year.
8,000 job cuts in Germany
The restructuring includes 8,000 job cuts in BMW's home market of Germany, and the company plans to cut management functions more quickly under the drive. Fourth-quarter costs tied to the programme include writing off parts of previous vehicle and technology generations, a consequence of the rapid launch of BMW's new electric vehicle generation, and pricing in the costs of the redundancy programme.
Third-quarter earnings and China sales
Announced on Wednesday, BMW's third-quarter pre-tax earnings fell 11% to €2.1bn (£1.75bn), while revenue dropped 6% to €30.4bn, hurt by declining sales in China. Sales in China fell 22% in the first nine months of the year, which the company said was in line with the broader market downturn there. The operating margin in BMW's core automotive business narrowed to 3.4% - above analysts' forecast of 3.1% but down from 5.2% a year earlier. Excluding restructuring charges, the margin would be above 2%, within BMW's previous forecast range.
Nedeljković promises faster measures
Chief executive Milan Nedeljković said structural measures would be intensified and accelerated in response to the developments.
Current developments in our industry call for decisiveness and swift implementation. We will therefore specifically intensify and accelerate structural measures.
China remains a key focus, Nedeljković said, with the Neue Klasse revival of the model range beginning there this month through the launch of the iX3.
German car sector under strain
BMW follows Volkswagen in taking on painful restructuring costs caused by a rapidly changing market. Mercedes-Benz cut its profit outlook the week before BMW's warning, and also reported lower third-quarter profits. Porsche rebounded slightly, but only after steep charges last year as it overhauls its lineup and retreats from China. Western automakers have struggled against lower-cost Chinese domestic rivals, reducing their sales in China and raising Chinese exports to Europe.
