- BMW Group's pre-tax profit in the second quarter fell by 35.1% year-on-year to 1.7 billion euros, with revenue down 7.9% to 31.26 billion euros, dragged down by a sluggish Chinese market and rising tariff costs.
- The automotive business's EBIT margin narrowed from 5.4% in the same period last year to 2.3%, with additional U.S. tariffs dragging down the margin by about 1.25 percentage points, and deliveries in the Chinese market plummeting by 30.2%.
- The group plans to cut thousands of jobs in Germany by the end of 2027 to cope with long-term profitability pressures from the global economic slowdown and regional conflicts.
Profitability Under Pressure and Margin Contraction
BMW Group (ETR:BMWG) saw a comprehensive decline in its second-quarter financial indicators, with net profit shrinking by 34.9% year-on-year to 1.2 billion euros. The automotive business's EBIT margin recorded only 2.3%, significantly narrowing by 3.1 percentage points from the same period last year. The decline in profitability indicators is mainly due to expanded end discounts and limited pricing power, reflecting the real pressure of valuation reassessment and downward shift in profit centers for traditional luxury car companies amid a slowdown in high-end consumption.
Regional Market Divergence and Challenges in the Chinese Market
Global vehicle deliveries in the second quarter fell by 4.9% year-on-year to 590,947 units, with regional performance showing significant divergence. The European and U.S. markets achieved growth of 7.6% and 11.9% respectively, but deliveries in the Chinese market plummeted by 30.2%, completely offsetting the incremental contributions from the European and American markets. The ongoing price war among local Chinese new energy brands has severely squeezed the premium space and capital recovery speed of traditional fuel and luxury models.
Tariff Frictions and Macroeconomic Impact
Additional U.S. tariffs directly led to a decline of about 1.25 percentage points in the automotive business's EBIT margin. Although partial tariff refunds this quarter provided temporary relief, they could not fully offset the marginal cost expansion caused by policy frictions. Meanwhile, tensions in the Middle East and unfavorable exchange rate fluctuations further exacerbated operational risks in the multinational supply chain, prompting capital markets to reassess the defensive resilience of the global automotive industry chain.
Strategic Transformation and Cost-Reduction Measures
To reverse the profitability disadvantage, BMW announced plans to cut thousands of jobs in Germany through voluntary departure schemes by the end of 2027 to reduce fixed operating costs. In contrast to the contraction of traditional businesses, global deliveries of pure electric vehicles grew against the trend by 5.2% to 116,807 units, accounting for nearly 20% of total deliveries. This indicates that the group is accelerating its transition to electrification, aiming to reconstruct core competitive barriers during the industry's reshaping period.
