More speed, more efficiency: BMW Group realigns for tougher competition
BMW Group reports a 29.4% drop in first-half earnings as China sales fall and competition intensifies, prompting a workforce restructuring and cost-cutting measures.
The BMW Group has agreed with its Works Council on a restructuring program featuring voluntary severance packages as part of a broader effort to adapt to intensifying global competition and regional regulatory pressures. Milan Nedeljković, Chairman of BMW AG’s Board of Management, stated the company is reshaping its organization to remain competitive amid geopolitical and market challenges. The move follows a 35.1% decline in second-quarter pre-tax earnings to €1,697 million, with a 5.4% margin, while first-half earnings fell 29.4% to €4,045 million.
Global vehicle deliveries in the first half of 2026 totaled 1,156,727 units, a 4.2% decrease year-on-year, with China deliveries down 20.4% to 261,773 units. The MINI brand saw a 17.1% increase in second-quarter deliveries, reaching 81,032 units, driven by strong demand for fully-electric models, which accounted for 36.9% of MINI’s total sales. In Europe, fully-electric vehicle sales rose 37.9% in the second quarter, with 31.3% of new deliveries being electric, supported by the launch of the BMW iX3.
Revenues for the first six months of 2026 declined 8.0% to €62,266 million, impacted by lower sales volumes and increased competition. Research and development spending decreased 7.6% to €3,714 million, while capital expenditure fell 30.5% to €1,900 million, reflecting planned cost reductions. Sales and administrative expenses also dropped 6.1% to €4,777 million, as the company targets a lower cost base to address competitive pressures.
Group earnings before tax for the first half of 2026 totaled €4,045 million, down 29.4% from the prior year, with the Automotive Segment’s EBIT margin at 3.6%. Financial Services reported a 5.0% increase in new contracts to 866,088, though profit before tax fell 15.4% to €1,008 million due to provisions for customer compensation programs. The company projects free cash flow of over €2.5 billion for the full year.