BMW reports lower Q3 earnings as China woes mount
BMW reports a drop in profits in the July to September quarter amid fierce competition from China.
German car manufacturer BMW announced a 15% decrease in net profit for the third quarter, as competition from China adversely affects the global automotive industry. The company's net profit for Q3 dwindled to €1.45 billion, while sales declined by nearly 6% to €30.45 billion. The primary reason behind the slump was BMW's underwhelming performance in China.
Despite selling more vehicles in the US and Europe compared to the same period last year, this growth was insufficient to counterbalance the decline in China. BMW's car deliveries in the country, already at their lowest since 2017, fell by 24.8% in Q3, contributing to a global delivery decrease of 6.3%. BMW's CEO, Milan Nedeljkovic, declared that the company would intensify and expedite structural measures to address the situation.
Additionally, the firm reduced its full-year outlook for 2023, attributing the change to the accelerated implementation of restructuring measures, which include 8,000 job cuts in Germany. German car manufacturers have been grappling with the challenge of competing with Chinese counterparts, particularly in the electric vehicle sector, resulting in cost-cutting initiatives.
VW, the world's second-largest automaker, is grappling with increasing competition from falling demand in its home market, China. BMW, along with industry giants Volkswagen and Mercedes-Benz, have announced plans to scale back production and reduce expenses. Meanwhile, the Volkswagen Group reported its worst quarterly earnings in over a decade in October, aiming to eliminate around 15% of its global workforce, or 100,000 jobs, by the end of the decade.
BMW has pledged to reduce up to 8,000 jobs, equivalent to 5% of its workforce, by the conclusion of 2027. On the contrary, German auto parts supplier Schaeffler disclosed plans to cut nearly 3,500 jobs and shutter five European sites by 2028. The company stated that three-quarters of the 3,460 job cuts and four of the five site closures will take place in Germany.
German automotive supplier Bosch announced last year that it would eliminate 13,000 jobs, primarily in its automotive division.
Written by urgent.news from DW English (Business)'s reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
