BMW cuts annual outlook as third-quarter earnings fall amid China weakness and restructuring

BMW's third-quarter earnings fell, and the carmaker lowered its outlook for the current year. Deutsche Welle and Reuters both link the outlook cut to BMW's restructuring. Both also describe the company as facing weakness in the Chinese market.

The two outlets used different earnings measures. Deutsche Welle reported a decline in net profit. Reuters reported a decline in pre-tax earnings, which it said was in line with expectations.

Results and outlook

According to figures Deutsche Welle attributed to the company, net profit fell nearly 15% to 1.45 billion euros ($1.61 billion). Sales fell nearly 6% to 30.45 billion euros, according to the same report.

Deutsche Welle said BMW lowered its outlook on Tuesday. Reuters described the reduction as another cut and said large restructuring charges are looming towards the end of the year.

China and other markets

According to Deutsche Welle, poor business in China was the main cause of the decline in BMW's results. It reported that car deliveries in China fell 24.8% in the quarter, after reaching their lowest level since 2017 last year.

Deutsche Welle also reported that BMW sold more cars in the US and Europe than in the same period last year. It said those sales only partially offset the decline in China.

Jobs and the wider industry

According to Deutsche Welle, BMW has announced that it will cut up to 8,000 jobs, about 5% of its workforce, by the end of 2027.

Deutsche Welle reported that BMW, Volkswagen and Mercedes-Benz have announced plans to scale back production and reduce costs. It said Volkswagen Group posted its worst quarterly results in more than a decade in October and is looking to cut about 15% of its global workforce, or 100,000 jobs, by the end of the decade.

The same report said Schaeffler announced on Tuesday that it planned to cut 3,460 jobs and close five sites in Europe by 2028. Three-fourths of the job cuts and four of the site closures would be in Germany. Bosch announced last year that it would cut 13,000 jobs, mostly in its auto division, according to Deutsche Welle.

What each side says

According to Deutsche Welle, BMW cited the faster-than-planned implementation of restructuring measures when it lowered its outlook. Deutsche Welle quoted CEO Milan Nedeljkovic as saying BMW would "specifically intensify and accelerate structural measures".

What the reports do not include

The reports reviewed by Vocemundi do not include BMW's previous or revised outlook figures, its pre-tax earnings figure, or the size of the restructuring charges. They do not describe which structural measures the CEO meant or quantify how much of the decline stems from China or restructuring. Deutsche Welle refers both to "8,000 layoffs in its home market" and to up to 8,000 jobs, and does not clarify whether the figure is exact or a ceiling, or whether all the cuts are in Germany. Only a summary of the Reuters report was available for review.

Analysis

The reports point to two pressures on BMW at once: weaker business in China and the cost of restructuring. They do not show how much each contributed to the earnings decline. One possible scenario is that faster restructuring weighs on this year's results but lowers costs later. Another is that weakness in China persists, with sales gains in the US and Europe still offsetting only part of it. Cost-cutting announcements at other automotive companies may suggest wider industry pressure, although the reports do not establish a single cause. BMW's revised outlook figures and restructuring charges would help readers assess these outcomes.

Produced by the Vocemundi newsroom with AI assistance.