BMW has laid out a wide-ranging efficiency drive after describing its first-half figures as unsatisfactory, with a sharp downturn in China forcing a guidance cut in June. In a statement to a quarterly results call, board chairman Milan Nedeljković said the company would accelerate cost reductions and agree a voluntary severance programme in Germany. BMW says it aims to return to an 8–10% EBIT margin by the start of the next decade.

BMW is moving to cut fixed costs and slim down its organisation after what its management called an unsatisfactory first half of 2026. In a statement to a conference call on the group’s quarterly report to 30 June, Dr Milan Nedeljković, chairman of the board of management of BMW AG, said a rapid deterioration in the Chinese market had been the main trigger for the guidance BMW lowered in June.

According to Nedeljković, the challenges go well beyond one market. He pointed to new competitors expanding across Asia-Pacific, Latin America and Europe, alongside headwinds from tariffs, trade barriers and exchange rates, tighter regulation in Europe, and the impact of the ongoing conflict in the Middle East.

Cost cuts and a severance programme

In the short term, BMW says it will accelerate cost-reduction initiatives aimed at structural and efficiency measures, with a sustained reduction in overall fixed costs. The company says the impact should be visible from 2027 onwards. As part of making the organisation leaner, BMW says it has reached an agreement with the General Works Council on a workforce restructuring programme, including a voluntary severance scheme for indirect functions in Germany.

BMW is also examining four areas internally: the customer journey, its organisational structures, delivery and purchasing, and engineering. Measures include rolling out a new sales model in Europe that shifts dealers from wholesalers to retailers, making greater use of AI to automate processes, and expanding its “local-for-local” production approach.

A mixed second quarter

The company says the picture in the second quarter was uneven. Europe and the US performed strongly and partly offset weakness in China and Asia-Pacific, while performance in China was said to be at least in line with the overall market this year. In Europe, BMW says fully electric sales jumped by more than a third in Q2, whereas in the US it was combustion-engined models that drove double-digit growth as electric demand in the wider market fell.

Nedeljković said BMW would build on recent groundwork, including its investment in the Neue Klasse, the consolidation of its dealer network in China and €2.5 billion of cost savings made in 2025.

Neue Klasse ramps up

The rollout of the electric Neue Klasse is now under way. BMW says the iX3 is on track to reach 100,000 orders and that a second shift was added at Plant Debrecen in Hungary ahead of schedule; the plant has already built 50,000 iX3, which the company calls the fastest ramp-up of a new BMW Group facility. Initial orders for a BMW i3 launch edition began early in June, with regular ordering due to open at the end of September. BMW also recently premiered the fifth-generation X5. The company says it will have launched 40 new and updated models by the end of next year, including the first Neue Klasse models built for China — the iX3 and a long-wheelbase i3 — at its plant in Shenyang.

What it means

The statement signals that BMW, like several established carmakers, is under pressure from a cooling Chinese market and fast-growing local rivals, and is responding with structural cost cuts rather than one-off savings. Management says it remains ambitious and intends to work back to its strategic EBIT margin corridor of 8–10% by the beginning of the next decade.

Facts: BMW iX3 50 xDrive

  • Energy consumption (combined): 18.1–15.1 kWh/100 km (WLTP)
  • CO₂ emissions (combined): 0 g/km (WLTP), CO₂ class A
  • Electric range: 679–805 km (WLTP)

BMW says regular ordering for the i3 launch edition opens at the end of September.

Source: www.press.bmwgroup.com