The automaker lowered its projected profit margin for the year to between -0.5% and 0.5%, down from an earlier target of 4% to 6%. This downgrade follows an 11% decline in third-quarter pre-tax earnings to €2.1bn as revenue contracted by 6%. Intensifying headwinds in Asia further compound these domestic restructuring burdens, underscored by a 22% drop in sales across China during the first nine months of the year. Despite the downturn, the company plans to launch its Neue Klasse iX3 model in the Chinese market this month.
Key points
Heavy restructuring expenses linked to 8,000 domestic job cuts are creating the potential…: Heavy restructuring expenses linked to 8,000 domestic job cuts are creating the potential for full-year financial losses.
Write-offs of older vehicle platforms are accelerating as the automaker shifts its resour…: Write-offs of older vehicle platforms are accelerating as the automaker shifts its resources toward new electric models.
Core automotive operating margins slipped to 3.4% during the third quarter amid industryw…: Core automotive operating margins slipped to 3.4% during the third quarter amid industrywide competition from cheaper Chinese rivals.
Sources checked by our analysis pipeline: 1
The German carmaker BMW has issued its second profit warning in a year, blaming the costs of a restructuring programme including significant job losses in the face of continuing competition from China.
The company is the latest to issue a profit downgrade in the German car sector, with Mercedes-Benz last week cutting its profit outlook. Western automakers have struggled to keep pace with lower-cost domestic rivals in China, which has led to reduced sales there and a rise in exports to Europe.
BMW signalled a potential for losses after slashing its profit margin to between -0.5% and 0.5% this year but blamed fourth-quarter costs tied to the restructuring that includes 8,000 job cuts in its home market. At the beginning of the year, BMW had still considered a margin of 4-6% would be possible.
It reported an 11% drop in third-quarter pre-tax earnings on Wednesday to €2.1bn (£1.75bn).
Sales in China fell 22% in the first nine months of the year but BMW said this was in line with the broader downturn in that market.
The technology giant has finalized its succession plan by securing an experienced corporate leader to steer the company forward. This permanent executive appointment resolves months of leadership vacancy at the helm of the organization. The transition establishes a definitive chief executive direction following the previous leader's exit.
Kraft Heinz plans to divest its North America coffee unit. The move comes as part of a turnaround effort led by Cahillane. Further details regarding the transaction have not been disclosed.