BMW reported a second-quarter automotive EBIT margin of 2.3%, sharply lower than a year earlier but above market expectations and within the company's full-year forecast range of 1% to 3%, according to the automaker. The margin was reduced by about 1.25 percentage points due to US and European tariffs.
The company faced unfavorable foreign exchange movements, higher commodity costs, and weakening demand in China, where local manufacturers are gaining market share amid a property downturn.
CFO Walter Mertl said competition in the global automotive industry had 'sharpened noticeably.' China remains BMW's most significant challenge, with domestic automakers eroding the company's market share.
New vehicles, including the iX3 from the Neue Klasse lineup and the i3 sedan, attracted strong demand. US sales rose nearly 12% during the quarter.
BMW achieved savings of €2.5 billion ($2.9 billion) last year. The restructuring plan includes cutting around 8,000 jobs, or about 5% of its workforce. This week, the company reached an agreement with employee representatives to begin offering severance packages. BMW is also increasing its use of artificial intelligence in vehicle development.
BMW confirmed its 2026 outlook and aims to return to its long-term automotive EBIT margin target of 8% to 10% by the beginning of the next decade.