ANNIE ALLEN (UK Bureau Chief)
BMW is counting on a fresh electric offensive to regain momentum in China after sales plunged 22%, intensifying pressure on the German luxury carmaker as cheaper local rivals challenge Western brands.
The steep decline in the first nine months of the year gives added urgency to BMW’s “Neue Klasse” model renewal, beginning in China this month with the launch of the iX3 electric SUV following a strong start in Europe.
The stakes extend beyond showroom sales. BMW’s core automotive operating margin narrowed to 3.4% in the third quarter, down from 5.2% a year earlier. Although that beat analysts’ forecast of 3.1%, it underlined the pressure on profitability.
Group pretax earnings stood at €2.1 billion ($2.4 billion).
BMW said its China sales decline reflected a broader market downturn. Western manufacturers have also struggled to keep pace with lower-cost domestic competitors.
Alongside its product push, BMW is accelerating restructuring. Having completed a comparatively small redundancy programme within three weeks, the company now intends to cut management functions more quickly.
“We do not want to lose this momentum,” Nedeljkovic said.
The pace contrasts with Volkswagen’s prolonged negotiations with unions and other stakeholders over plans to double group job cuts to 100,000.
But faster restructuring offers no guarantee of a smooth recovery.
Scope Ratings analyst Matthias Hellstern said BMW’s restructuring charge recognised the need to adapt to weaker growth, particularly in China, through cost reductions. While the scale suggested decisive action, he cautioned against assuming the turbulence was over.
For BMW, the challenge is now clear: turn its electric model revival into renewed demand while preventing shrinking margins from taking a deeper toll.
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