BMW makes even less profit

The sales crisis in China caused BMW's profits to collapse further in the third quarter. Expensive severance payments and the early retirement of older models are also wreaking havoc on the Munich car manufacturer's balance sheet.

German car industry BMW generates even less profit As of: November 4th, 2026 • 9:21 a.m

BMW is making less and less profit. In the third quarter, the group earned 1.45 billion euros after taxes, as the car manufacturer announced. That was almost 15 percent less than a year ago. In addition, the prospects for the current fourth quarter are poor after a profit warning on Tuesday evening.

The key driver for the decline is the crisis in the Chinese business. Like all German manufacturers, BMW is suffering from the fact that the world's most important car market is shrinking and at the same time is being shaken by increasing competition and fierce price wars. BMW also lost around a quarter of its sales there.

However, the Munich-based company is not as dependent on the Chinese market as, for example, the VW subsidiary Audi. In addition, the group was able to offset at least part of the decline through growth in Europe and the USA, so that sales only fell by 6.3 percent. Sales fell slightly more slowly by 5.8 percent to 30.5 billion euros.

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BMW had already issued a profit warning on the eve of the quarterly figures. It was the second in just five months. The profit margin in the car business is now expected to be between minus 0.5 and plus 0.5 percent for the current year. So far the forecast was 1 to 3 percent. This means the company could lose money in its core business. Of all things, the success of the austerity program is to blame, the costs of which - together with other effects - are putting pressure on profitability.

The program, which was announced in the summer, started at the beginning of October and was closed again after less than three weeks because the employees' interest in leaving the company in exchange for payments that were often well into the six-figure range was surprisingly high. Previous statements show that BMW was expecting costs of a good one billion euros. Further costs arise because the Munich-based company is phasing out older models earlier than originally planned.

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BMW CFO Walter Mertl described the burdens as an investment in the future. "Speed is a success factor in our planned realignment. That's why we're intensifying measures for more efficiency and leaner structures this year," he said. “We want to use this to strengthen our future margins.” CEO Milan Nedeljkovic also emphasized the importance of speed: "The development in our industry requires consistent decisions and rapid implementation. We will therefore specifically intensify and accelerate structural measures."

BMW has also lowered its sales expectations. The group is now assuming a moderate decline - that corresponds to 5 to 9.9 percent. Previously, the outlook here had been for a slight decline of 1 to 4.9 percent. BMW left its forecast for profit before taxes untouched. However, the group has been expecting a significant decline since the first profit warning in early summer. That would be more than 15 percent.

With its results in the third quarter, BMW performed slightly worse than its competitor Mercedes, which made a profit of 1.52 billion euros, but much better than Audi and VW.

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BMW papers had already lost in after-hours trading on Tuesday evening. On Wednesday morning they had a mixed trend at the start of trading.