BMW Profit Falls 15% as China Sales Slump Drives Faster Job Cuts

China downturn pushes BMW to accelerate restructuring

BMW reported net profit of €1.45 billion for the third quarter of 2026 on November 4, down nearly 15% from a year earlier, as a 24.8% fall in deliveries in China outweighed growth in Europe and the United States. Revenue fell 5.8% to about €30.5 billion, while worldwide vehicle deliveries declined 6.3%.

Chief executive Milan Nedeljkovic said the German carmaker would accelerate its restructuring and was prepared to make further job cuts. An existing programme targeted around 8,000 departures by the end of 2027, equivalent to roughly 5% of a global workforce of 154,000. He gave no number for additional reductions.

The results followed a profit warning on November 3, when BMW cut its forecast for the profitability of its automotive business to between a loss of 0.5% and a profit of 0.5% of revenue. Its previous forecast was for a margin of 1% to 3%. That puts the business of making and selling vehicles close to breaking even for the full year.

BMW faces two pressures at once. Falling sales in China are reducing income, while severance payments and the earlier retirement of older models are bringing restructuring expenses forward. Management wants those costs to produce savings later, but they are weighing on earnings now.

The pressure is also reaching workers in China. Around 1,800 redundancies were reported at BMW Brilliance Automotive in Shenyang from November 2, affecting production staff and some administrative employees. BMW Brilliance had not issued an official statement confirming those cuts.

How China is pulling down sales

BMW and Mini sold about 376,000 vehicles in China during the first nine months of 2026, a decline of 21.8%. Worldwide group deliveries fell 4.9% over the same period to approximately 1.71 million vehicles. The sharper 24.8% fall in China during the third quarter shows that the contraction there continued through the summer.

Europe and the United States provided some relief, with deliveries rising from a year earlier. Those gains were too small to offset the Chinese decline. BMW Group, which includes BMW, Mini and Rolls-Royce, consequently delivered fewer vehicles worldwide.

China has become a difficult market for established German manufacturers as domestic competitors compete aggressively on price, electric vehicles and software. Weaker demand adds to that pressure. BMW is trying to protect sales while also changing how it develops and sources vehicles for Chinese customers.

China's share of BMW sales had already fallen from 32.3% in 2023 to 25.4% in 2025, a reduction of 6.9 percentage points. That shrinking share shows how much the geographic balance of the business had changed before the latest quarterly decline.

Why a savings programme is hurting profit now

BMW's revised automotive forecast uses EBIT margin, meaning earnings before interest and taxes as a percentage of revenue. At a margin of 0.5%, a business earns about €0.50 in operating profit for every €100 of revenue. At minus 0.5%, it loses the same amount.

The new range of minus 0.5% to plus 0.5% is much narrower and lower than the previous 1% to 3% forecast. It concerns the automotive operation, while the €1.45 billion quarterly net profit is the result for the group after taxes and other financial items.

BMW had expected its departure programme to cost more than €1 billion. Employees showed stronger interest than expected in leaving in exchange for severance payments, often reaching six figures. Faster participation brings the expense of those departures into the accounts sooner.

Older models are also being discontinued earlier than planned, adding further costs. Chief financial officer Walter Mertl described the restructuring expenses as an investment in the future and said measures to improve efficiency and simplify the organisation would be intensified this year.

The November warning was BMW's second in five months and its third in 13 months. Its forecast for group profit before tax remained unchanged, still pointing to a decline of more than 15% for 2026.

Voluntary departures could bring job cuts forward

BMW launched its latest voluntary departure programme in early October and closed it less than three weeks later because employee interest was unexpectedly strong. A reported allocation of 5,000 places filled within three days, showing how quickly applications arrived within the broader programme.

In Germany, the reductions described so far mainly affect administration and development. They are being pursued through voluntary severance rather than compulsory redundancies. Employees who accept leave with a payment, while BMW aims to reduce its continuing wage bill.

Nedeljkovic, BMW's chief executive, told a conference call that the response would allow the company to complete the programme more quickly:

We will be able to complete the program in a short amount of time.

He said the company was willing to consider further reductions, while leaving the eventual scale open:

We'll go as far as our feet will carry us. And as far as makes sense for us.

For employees, the immediate change is the pace of restructuring. Departures originally planned across a longer period may happen sooner, and management is considering further reductions beyond the existing target. For BMW, the calculation is whether paying more now can lower recurring costs quickly enough to support future margins.

Shenyang workers face a different kind of reduction

BMW Brilliance's reported cuts in Shenyang amount to around 9.5% of a workforce previously numbering nearly 19,000. The operation includes the joint venture's headquarters and a manufacturing site described as the largest in BMW Group's production network.

The reported reductions chiefly affect people on the production floor, although administrative workers have also been affected. Employees across different ages and levels of seniority were said to be included, from younger staff to managers approaching retirement.

Workers were reportedly offered an N+5 severance package. Under the arrangement described, N represents years of service, with five additional months of basic salary added to the calculation. That makes length of service and basic pay central to the amount each departing employee receives.

Some employees reportedly received short notice by telephone or in individual meetings. Others were removed from their workstations during a shift or told not to arrive in work clothing the following day. These accounts describe direct dismissals in manufacturing, a different approach from Germany's voluntary programme.

The reported layoffs followed earlier reductions in staffing and outside services. Few external specialists had been hired over the preceding three years, expiring employment contracts were rarely renewed, and the use of external service providers had been reduced sharply.

BMW wants more Chinese sourcing and technology

BMW plans to move more of the supply chain for vehicles produced in China into China itself. The aim is to regain market share by drawing more heavily on local suppliers and the country's technology industry.

A supply chain is the network of companies providing the parts, materials and services needed to build a vehicle. BMW's plan would place more of that activity near its Chinese vehicle production, making local businesses a larger part of the operation.

Nedeljkovic also pointed to cooperation with Chinese partner Momenta on driving assistance software. Such systems help drivers with tasks such as steering or controlling speed. The partnership gives BMW experience it can apply beyond its Chinese business.

The chief executive described the exchange between BMW's Chinese operations and the rest of the group:

There's a very intense exchange we have with our business in China. The learning and technology transfer goes in both ways, as far as is legally possible.

BMW's approach combines reducing employment costs with deeper local involvement in purchasing and technology. China remains a production and development base as well as a market where the company is losing sales.

What BMW's earlier official figures show

BMW's 2024 quarterly statement documents an earlier period of severe pressure. For the third quarter of that year, the group recorded net profit of €476 million, down 83.8%, and revenue of €32.406 billion, down 15.7%. Those figures concern 2024; the latest results concern 2026.

The official statement attributed the 2024 delivery weakness partly to stops involving a supplied Integrated Brake System, or IBS, and partly to conditions in China. BMW also recorded additional warranty costs linked to technical measures for the braking system. Warranty costs are expenses a manufacturer bears when it must address covered problems with its products.

China deliveries fell 29.8% in the third quarter of 2024 to 147,839 vehicles, while worldwide deliveries dropped 13% to 540,881. BMW said low Chinese consumer confidence was affecting sales despite government support measures.

The automotive EBIT margin fell to 2.3% that quarter from 9.8% a year earlier. By the first half of 2026, the margin was 3.6%, while group profit before tax had fallen 29.4%. The latest forecast of roughly breaking even for the full year shows the additional pressure expected from restructuring and weaker sales.

Electric vehicle growth had continued during the earlier downturn. BMW's official statement recorded 294,052 battery electric vehicle deliveries in the first nine months of 2024, up 19.1%. Including plug in hybrids, electrified deliveries rose 6.2% to 409,120. Fully electric vehicles accounted for 19.1% of quarterly deliveries, compared with 15.1% a year earlier.

Pressure spreads across Germany's car industry

BMW remained profitable in the latest quarter, although its €1.45 billion result was slightly below Mercedes-Benz's €1.52 billion. Volkswagen faced a much larger financial setback: its third quarter loss reached €5.82 billion after tax, including a €6.4 billion reduction in Porsche's accounting value.

Volkswagen's China deliveries fell 38.5% in that quarter, compared with BMW's 24.8% decline. Both companies are losing substantial sales in the same market, though Volkswagen also absorbed the large Porsche charge.

Volkswagen's latest stated restructuring ambition is to eliminate 120,000 jobs worldwide across 10 brands by 2030. The earlier figure was about 100,000. Mercedes-Benz is preparing to restart its own departure programme, adding to the employment pressure across German vehicle manufacturers.

Suppliers are also cutting back. Schaeffler announced plans on November 3 to eliminate 3,460 jobs and close five European sites by 2028. Around three quarters of the jobs and four of the sites are in Germany. Bosch previously announced 13,000 job cuts, mostly in its automotive division.

For workers and factory towns, the pressure extends beyond the companies whose names appear on finished cars. Lower production and spending also affect businesses that make components and provide engineering or other services.

The dates and targets that matter next

BMW now expects full year vehicle deliveries to fall between 5% and 9.9%, compared with its earlier forecast for a decline of 1% to 4.9%. That revision points to a difficult final quarter alongside the accelerated restructuring costs.

The main dates connect the financial warnings with decisions affecting employees:

• Early October 2026: BMW opened its latest voluntary departure programme, which closed less than three weeks later.
• November 2, 2026: Reported redundancies began at BMW Brilliance in Shenyang.
• November 3, 2026: BMW lowered its automotive margin and vehicle delivery forecasts.
• November 4, 2026: BMW announced third quarter results and plans to accelerate restructuring.
• End of 2027: The original deadline for BMW's target of around 8,000 job reductions.
• 2028: Schaeffler's deadline for its announced European job and site reductions.
• 2030: Volkswagen's target year for 120,000 job reductions worldwide.

BMW's next challenge is to turn the immediate expense of departures and model changes into lower continuing costs while stabilising sales in China. Its revised forecasts put both tasks under pressure before the year ends.

Key Points

• BMW's third quarter net profit fell nearly 15% to €1.45 billion, while revenue declined 5.8% to about €30.5 billion.
• Deliveries in China dropped 24.8%, outweighing gains in Europe and the United States.
• BMW cut its 2026 automotive margin forecast to minus 0.5% to plus 0.5% and expects vehicle deliveries to fall 5% to 9.9%.
• Strong demand for voluntary severance is accelerating a programme originally targeting around 8,000 departures by the end of 2027.
• About 1,800 layoffs were reported at BMW Brilliance in Shenyang, without an official company confirmation.
• BMW plans more Chinese sourcing and continued technology cooperation with Momenta as it seeks to regain market share.