BMW reports lower Q3 earnings as China woes mount

German automaker BMW disclosed a 15% decrease in net profit for the third quarter, attributed to the surge of competition from China's automobile sector. The company's earnings for Q3 reached 1.45 billion euros, a decline from the previous period. BMW's sales also dropped by nearly 6%, reaching 30.45 billion euros. The primary driver of the downturn was the company's underperformance in the Chinese market.

Although BMW managed to sell more vehicles in the US and Europe compared to the same period last year, this didn't entirely counterbalance the decline in China. BMW's vehicle deliveries in China plummeted by 24.8% in the quarter, causing a global delivery decline of 6.3%. In response, BMW CEO Milan Nedeljkovic announced that the company would intensify and accelerate structural measures.

On Tuesday, BMW also revised its outlook for the current year, citing the swift implementation of restructuring measures. These measures include layoffs of 8,000 employees in its home market. The German car industry is grappling with the challenge of competing with Chinese automakers in the electric vehicle market, prompting cost-cutting measures.

Other major players like Volkswagen and Mercedes-Benz have also announced plans to scale back production and reduce costs. Volkswagen, the world's second-largest carmaker, is bracing for a significant workforce reduction, aiming to cut about 15% of its global workforce by the end of the decade, equivalent to around 100,000 jobs.

BMW has pledged to eliminate up to 8,000 positions, or approximately 5% of its workforce, by the end of 2027. Meanwhile, German automotive parts supplier Schaeffler is set to cut almost 3,500 jobs and close five sites in Europe by 2028. The majority of these job cuts, three-fourths, and four of the site closures will occur in Germany.

German automotive supplier Bosch, the world's largest, revealed plans to cut 13,000 jobs, primarily within its auto division, last year.