BMW Profits Fall Amid Chinese Slowdown

BMW has reported an 11% decline in third-quarter pretax profit and sharply reduced its annual profitability outlook, as weaker demand in China and restructuring expenses intensify pressure on the German luxury carmaker.

The company generated pretax earnings of €2.1 billion during the July-to-September period, broadly matching analysts' expectations. Revenue declined 6% to €30.4 billion, while the operating margin of its automotive business narrowed to 3.4% from 5.2% a year earlier. BMW's sales in China fell 22% during the first nine months of 2026, reflecting difficult trading conditions in one of its most important markets.

Management has accelerated a restructuring programme that includes approximately 8,000 job reductions in Germany. Expected fourth-quarter costs prompted BMW to lower its annual automotive operating margin forecast to between minus 0.5% and plus 0.5%. Excluding restructuring charges, the company expects the margin to remain above 2%. Chief executive Milan Nedeljkovic has indicated that BMW will simplify management structures and pursue faster organisational changes.

The difficulties reflect a broader challenge for established European luxury carmakers competing with increasingly capable Chinese manufacturers. Domestic brands have strengthened their positions through electric vehicles, technology features and competitive pricing, reducing the advantage historically enjoyed by imported premium models. BMW must protect the appeal of its established vehicles while investing in new technology and adjusting its cost base. Its latest results demonstrate that brand recognition alone may no longer guarantee pricing power or profitability in the world's largest automotive market.