Economy BMW Profit Dives by More than a Third

China in particular is weighing on Munich (Germany). The second-quarter figures show why BMW plans to cut thousands of jobs. New CEO Milan Nedeljkovic has a lot of work ahead of him.

BMW's profits are collapsing. In the second quarter, the Munich-based company earned only 1.2 billion euros (approx. $1.29 billion) after taxes—35 percent less than in the same period last year, according to their statement. Revenues also fell significantly—from 34 billion to 31 billion euros (approx. $36.5 billion to $33.3 billion). The figures come just one day after a job cut program was announced and highlight how necessary the planned savings are for BMW.

Looking solely at the automotive segment, the decline is even more drastic. In this business area, operating profit (EBIT) plummeted by more than 60 percent to 629 million euros (approx. $676 million). This means BMW earned more in the past quarter from its financial services than from manufacturing cars.

Global Situation

Not Only German Car Manufacturers Suffer from Sales Difficulties

Above all, business in China went poorly for the Munich-based company. BMW's sales there dropped by nearly a third in the second quarter. The increasingly strong competition from China is also affecting other markets, particularly in Asia. And as if that weren't enough, tariffs are costing hundreds of millions, exchange rate effects are impacting results, and the war in the Middle East is weighing on the global economy.

Tough Start for the New Boss

"In recent weeks, we have seen how quickly our business environment can change," says new BMW CEO Milan Nedeljkovic. It is a tough start for the former head of production. In his less than three months in office, he has already had to issue a significant profit warning, and just yesterday it was revealed from company sources that BMW plans to cut 8,000 jobs worldwide. To this end, the company is introducing, among other measures, a severance package in Germany.

Now Nedeljkovic also directly comments on the plans. "The challenges across the entire automotive industry are rapidly increasing: intense global competition, rising regulatory requirements, and the impact of geopolitical conflicts will shape our business model in the coming years. Therefore, it is important to be lean and agile."

CFO Walter Mertl also points to intensified competition. "After savings of 2.5 billion euros (approx. $2.68 billion)  last year, we are intensifying and accelerating our efficiency measures and addressing structural changes in a targeted way. Our goal is less complexity and a lower cost base," he says. Last year, BMW had already reduced its number of employees.

AI Is Expected to Help

However, the two managers are rather vague about the details of the downsizing program. In particular, they neither specify the exact savings target nor confirm the number of jobs to be cut.

AI is also expected to play a role in the savings. Currently, there is a high level of specialization and division of labor at BMW, says Nedeljkovic. With artificial intelligence, employees can be provided with more information. This makes them faster and ensures that smaller teams can cover broader areas of responsibility.

At least the employees in production in Germany currently have little reason to worry. On the one hand, the severance program does not affect them, and on the other hand, Nedeljkovic emphasized that capacity utilization in the German plants is very good—and this applies to the coming years as well.

For a long time, BMW managed to navigate the crisis somewhat better than the other two major German car manufacturers, Mercedes-Benz and Volkswagen. However, the problems are now catching up with the Munich-based company more and more. Still, in terms of profits in the second quarter, they remain ahead of their Stuttgart rival Mercedes, which posted 1.09 billion approx. ($1.17 billion). after taxes. Volkswagen, with 1.54 billion (approx. $1.65 billion), leads the pack but is also significantly larger.

Despite everything, BMW—like the other German manufacturers—is currently in a downward spiral. How steep it is becomes clear with a look in the rearview mirror. In the most recent half-year, the Munich-based company recorded a profit of 2.9 billion euros (approx. $3.1 billion). In 2025, it was still 4 billion euros, 5.7 billion in 2024, and even 6.6 billion in 2023. In 2022, it exceeded 13 billion euros —though this figure is not a fair comparison due to an extremely positive one-time effect.

BMW is placing hope, among other things, on the vehicles of the Neue Klasse. The first model, the iX3, has now been built more than 50,000 times. The total number of orders is reportedly already on its way to reaching 100,000.

A quick recovery for the manufacturer is not in sight, however. On the one hand, the burdens from the planned restructuring will weigh on results in the second half of the year. On the other hand, the global automotive market is currently too challenging to make a rapid turnaround.