BMW warns on profit again as 8,000 job cuts and China slump bite

BMW just sounded the alarm again. The German carmaker issued its second profit warning in a year on Wednesday, pinning the damage on a restructuring drive that will wipe out 8,000 jobs in its home market, according to The Guardian.

The headline number stings: BMW now expects its automotive profit margin to land between -0.5% and 0.5% this year, opening the door to losses. Back in January, the company still thought 4% to 6% was within reach. Third-quarter pre-tax earnings slipped 11%, landing at €2.1bn (£1.75bn), while revenue slid 6% to €30.4bn.

China is the sore spot. Sales there tumbled 22% over the first nine months of the year, though BMW insists that tracks the wider slump in that market rather than a BMW-specific problem. Western automakers keep getting squeezed by cheaper domestic rivals in China, and the fallout is washing back into Europe as exports pile up.

Chief executive Milan Nedeljković wasn't sugar-coating it. “Current developments in our industry call for decisiveness and swift implementation. We will therefore specifically intensify and accelerate structural measures,” he said, adding that China “remains a key focus.” BMW is betting on its Neue Klasse reboot, starting with the iX3 launch in China this month.

There's a twist in the fine print: the core automotive operating margin narrowed to 3.4%, which still beat analysts' 3.1% forecast, though it's down from 5.2% a year earlier. Strip out restructuring charges and the margin would sit above 2%, inside the old guidance. BMW also wants to trim management functions faster.

BMW isn't alone on the pain train. Mercedes-Benz cut its profit outlook last week, Volkswagen has already booked its own painful restructuring costs, and Porsche only managed a slight rebound after steep charges. The rush to launch new EVs is forcing BMW to write off chunks of its previous vehicle and technology generations — expensive housekeeping for a market that won't slow down.