BMW Group realigns for tougher competition as Q2 earnings drop 35%
BMW Group reported Q2 pre-tax earnings of €1,697 million (down 35.1%) and reached a workforce restructuring deal with the Works Council, citing intense competition and a sharp downturn in China.
- €1,697 million (-35.1%)
- 1,156,727 units (-4.2%)
- +37.9% in Q2
- €513 million in Q2 (-73.4%)
What Happened
The BMW Group is accelerating cost-cutting and organizational changes after a difficult second quarter. The company reached an agreement with the Works Council on an extensive workforce restructuring program including voluntary severance packages. CEO Milan Nedeljković said the industry faces rapidly escalating challenges from global competition, regional regulatory requirements, and geopolitical conflicts, making it important to be lean and agile.
€1,697 million
Down 35.1% year-on-year; EBT margin fell to 5.4% from 7.7%.
1,156,727vehicles
Down 4.2% year-on-year, with China deliveries sliding 20.4% while Europe and USA grew.
- +5.4% (Q2: +7.6%)
- +3.9% (Q2: +11.9%)
- -20.4% (Q2: -30.2%)
Demand for the Neue Klasse is growing: the BMW iX3, the first model, is on track for 100,000 orders since its sales launch, and the BMW i3 Launch Edition had strong early demand. BEV sales in Europe rose 37.9% in Q2, with nearly one in three new vehicles delivered being fully electric. The company also confirmed its 2026 guidance, forecasting an Automotive Segment EBIT margin of 1-3% and a significant decrease in group earnings before tax.
- Automotive Segment deliveries: slight decline
- Automotive Segment EBIT margin: 1-3%
- Group earnings before tax: significant decrease
- Automotive Segment RoCE: 1-5%
- Financial Services RoE: 13-16%
- Motorcycles segment EBIT margin: 4.0-6.0%
“Competition in the global automotive market has sharpened noticeably. Following cost savings of €2.5 billion last year, we are intensifying and accelerating our efficiency measures while implementing targeted structural measures.”
Why this matters
BMW is taking structural cost-cutting measures, including voluntary severance, to stay competitive amid falling profits and a challenging global market. Investors and employees will be watching how the Neue Klasse electric vehicle ramp-up and efficiency initiatives offset headwinds from China tariffs and trade disputes.
Terms in This Story
- EBT
- Earnings before tax, a measure of a company's profitability before income taxes are deducted.
- EBIT
- Earnings before interest and taxes, a measure of a company's operating profitability.
- Neue Klasse
- BMW's new generation of electric vehicles built on a dedicated EV platform, starting with the iX3 and i3.
- BEV
- Battery electric vehicle, a car powered solely by an electric battery.
Summarised from the linked release; details can be imperfect — always verify against the original source.