BMW on Wednesday reported a fall in profits the day after issuing its second profit warning of the year as Chinese competition shakes the global car industry.
BMW’s third-quarter pre-tax profit fell 11%, the German carmaker said on Wednesday, hours after warning that restructuring costs would leave its core car business close to break-even this year.
ADVERTISEMENTADVERTISEMENTNet profit for the third quarter fell about 15% to €1.45bn, BMW said, and revenue fell almost 6% to €30.45bn.
In its latest profit warning, issued on Tuesday, the carmaker said that costs partly linked to restructuring, including 8,000 layoffs in its home market, could push its core car business into an operating loss for the year.
The operating margin in the car division narrowed to 3.4% in the third quarter, down from 5.2% a year earlier.
BMW now expects the car division’s operating profit margin to be between -0.5% and +0.5% for the full year, down from its previous forecast of 1–3%.
"Current developments in our industry call for decisiveness and swift implementation," BMW CEO Milan Nedeljkovic said Wednesday. "We will therefore specifically intensify and accelerate structural measures."
Like its peers Mercedes-Benz and Volkswagen, BMW is cutting jobs to try to bring costs down as lower-cost and more advanced Chinese rivals have largely muscled their German counterparts out of China and are now stepping up exports to Europe.
BMW's vehicle deliveries in China — last year already at their lowest level since 2017 — fell another 24.8% in the quarter, the firm said, dragging overall global deliveries down 6.3%. Deliveries rose 2.6% in Europe and 2.5% in the US.
The group, which, apart from its namesake, also includes Mini and Rolls-Royce, has promised to shift more of the supply chain for its Chinese vehicles into China in a bid to regain market share.
BMW shares were up 2% from Tuesday’s close at around 11:00 CET on Wednesday.
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