The German carmaker BMW, which until recently was considered one of the few exceptions to the crisis in the country's automotive industry, is facing years of serious economic difficulties. The company plans to cut about 8,000 jobs, limit its model range and reduce costs, reports the German edition WELT.
The new CEO Milan Nedeljkovic is undertaking a restructuring of the concern against the backdrop of falling profits and increasing competition. BMW has already lowered its forecast for financial results in 2026, expecting the operating margin in the automotive business to be between 1% and 3% instead of the initially expected 4-6%.
A particularly serious problem remains the Chinese market, where German carmakers are losing ground due to competition from local companies. In the first half of 2026, BMW's sales in China fell by more than 20%, while in the second quarter the decline reached 30.2%. At the same time, the operating profit of the automotive division shrank by more than 60% to 629 million euros.
The planned cuts will mainly affect the administrative and development divisions, with the company planning voluntary departure programs. By mid-2027, BMW intends to reduce the number of business units and related management positions by 20%. A reduction in model variants, closer cooperation with suppliers and a wider use of artificial intelligence are also planned.
Despite the savings, the concern continues to invest in electric mobility. BMW plans to invest around 2 billion euros in production capacity in Germany, including 1 billion euros for a battery plant. The Munich-based company is to produce all-electric cars from 2027.
According to the strategy presented to investors, the company aims to increase the operating margin in the automotive business to 3-5% by 2028 and return to its long-term target of 8-10% at the beginning of the next decade. This means that a significant improvement in profitability is only expected in a few years.
BMW's problems reflect a broader crisis in the German automotive industry, which is facing high production costs, weakening demand and increased international competition. According to the German economic institute Ifo, the business climate in the sector deteriorated sharply in September, with the indicator falling to minus 35 points.