German carmaker BMW Group reported a nearly 15% drop in third-quarter net profit on Wednesday, after weak sales in China and a profit warning issued the day before. The consequences will also be felt in China: according to Chinese media, 1,800 jobs will disappear at the BMW Brilliance joint venture.
The Munich-based company said net profit fell to €1.45 billion from the previous year. The decline was largely driven by poor business in China, where German carmakers are struggling with falling demand, growing competition and fierce price wars.
BMW’s Q3 sales in China fell by around a quarter. China’s share of global BMW sales shrank from 32.3% in 2023 to 25.4% in 2025. The company offset some of the decline with growth in Europe and the United States in the third quarter. As a result, global vehicle sales fell by 6.3%, while revenue declined by 5.8% to €30.5 billion.
Profit warning
BMW had just issued a profit warning on Tuesday evening, its second this year and third in just 13 months. The operating profit margin in the automotive segment is now expected to be between minus 0.5% and 0.5% in 2026, down from the previous forecast of 1% to 3%. This means BMW could record a loss in its core business.
The downgrade is partly due to restructuring costs, including a voluntary redundancy program that closed after less than three weeks because of unexpectedly strong employee interest. BMW had previously indicated that it expected the program to cost more than €1 billion.
The company also lowered its annual sales forecast, now expecting a decline of between 5% and 9.9%, compared with its previous forecast of 1% to 4.9%. Its pre-tax profit outlook remains unchanged, with a decline of more than 15% expected.
BMW Brilliance
According to reports from Chinese media, the BMW Brilliance joint venture began layoffs in China on 2 November, 2026. Employees are said to have discussed around 1,800 redundancies, which represents about 9.5% of the BMW Brilliance workforce. The German carmaker has not yet made a public statement.
The media reports were led by the Chinese tech magazine QuantumBit ROBO, citing statements from employees at the joint venture. The layoffs affect the headquarters and production site in Shenyang.
The manufacturing facility is the largest in the BMW Group worldwide and employs nearly 19,000 people. An official statement from BMW Brilliance regarding the layoffs has not yet been issued.
The redundancies in China primarily affect production-floor personnel; employees in administration have also been let go. The layoffs have apparently affected workers across all age groups and hierarchical levels, from young employees to long-serving managers nearing retirement.
8,000 jobs at stake
Globally, BMW aims to cut around 8,000 jobs, which is about 5% of its 154,000 employees. In Germany, however, this reduction almost exclusively affects administrative and development departments and is being implemented without compulsory redundancies through the voluntary severance program already mentioned.
The demand for these exit packages was so high that all 5,000 places were filled within three days, forcing the online site to close early. In contrast, the Chinese joint venture is opting for direct manufacturing layoffs.
Laid-off employees in Shenyang are being offered a severance package under the ‘N+5’ scheme, which consists of their years of service plus five months’ salary based on their basic wage.
According to reports, many employees were dismissed on short notice by phone or in individual meetings. Some were removed from their workstations during their shift or told not to appear in work clothing the following day.
Significant measures
“In sales, we are preparing the rollout of our direct sales model for the BMW brand in Europe, which will start next year. We are also taking measures to expand our offering. In Europe, this means strengthening our presence in the high-volume entry premium segment by introducing another fully electric BMW model in 2028. We are also looking at introducing an additional offering above the current top-end model, the BMW X7, tailor-made for the U.S. market,” the CEO continued.
“In engineering, we want to reduce the development cycle significantly. At the same time, we are reviewing the number of variants across our entire portfolio and will reduce complexity. In purchasing, we are reorienting our sourcing strategy and leveraging strategic partnerships, ‘Industry Best Offer’, and AI applications. In parallel, we are streamlining our organizational structures across all divisions of BMW AG to become more agile and efficient,” he concluded.
Regarding China, Nedeljkovic did not mention redundancies at BMW Brilliance. In general, he said BMW Group will further strengthen local R&D and sourcing functions to focus even more on Chinese customer needs and address them faster.
“We are also looking to leverage our production network in Shenyang more broadly by considering exports of vehicles manufactured in China to markets in Asia Pacific. Overall, we are taking steps in all our major regions to develop our local footprints further and localize our supply chains. This is the basis for a more resilient and profitable global setup.”
