BMW warns on profits as 8,000 job cuts deepen restructuring amid rising China competition
BMW has issued its second profit warning of 2026, citing restructuring costs from 8,000 job cuts and intensifying Chinese competition.
BMW has issued its second profit warning this year, slashing its full-year profit margin forecast to between -0.5% and 0.5% as the cost of a major restructuring plan—including 8,000 job cuts—weighs on its bottom line. The announcement comes as the German carmaker faces accelerating competition from lower-cost Chinese rivals and a sharp decline in sales in its largest market outside Europe.
Third-quarter pre-tax earnings at BMW fell 11% to €2.1bn, and revenue dropped 6% to €30.4bn, according to company filings on Wednesday. The company said the restructuring would generate significant upfront costs in 2026, but expects efficiency gains in subsequent years.
Sales in China, which accounts for a significant portion of BMW's global deliveries, fell 22% in the first nine months of the year, reflecting both weakening demand and the growing strength of domestic Chinese automakers. CEO Milan Nedeljković cited the sales slump in China as a primary driver behind the profit warning, warning that further downgrades may be needed if the market does not stabilize.
The restructuring plan, which includes job cuts across European plants, aims to streamline BMW's production network and adapt to a market increasingly dominated by electric vehicles and price-sensitive consumers. The company said the decision was necessary to protect long-term competitiveness, but acknowledged the potential impact on workforce morale and productivity.
The broader automotive sector is also under pressure. Mercedes-Benz issued its own profit downgrade in recent weeks, while Volkswagen faces significant restructuring costs. Analysts say Western automakers may be forced to accelerate cost-cutting and innovation to defend market share against Chinese brands.
Despite near-term challenges, BMW hopes that structural measures and the launch of the iX3 in China will help regain market traction. However, the company warned that further adverse developments in China or continued pricing pressure could prompt additional restructuring or profit downgrades.
