Frankfurt (Germany) (AFP) – BMW said Wednesday that it would step up planned job cuts as it reported a drop in third-quarter profit, hit by cutthroat competition and falling demand in China, the world’s largest car market. Chief executive Milan Nedeljkovic said he could not give a number for the new cuts but was ready to make as many as required.
“We’ll go as far as our feet will carry us,” Nedeljkovic said during a conference call. “And as far as makes sense for us.” Collapsing sales in China have led to painful adjustments for Germany’s car industry. Mercedes-Benz is to restart its own layoffs program, and Volkswagen plans to cut 120,000 jobs globally across its 10 brands by 2030.
A BMW source told AFP in July that the carmaker was aiming for 8,000 job cuts by the end of 2027 under the program then being launched. Additional cuts could now be brought forward because of strong interest in the latest redundancy scheme, Nedeljkovic said Wednesday. “We will be able to complete the program in a short amount of time,” he said. “This highly positive response to the program opens up more significant potential to faster streamline our structures.”
In the three months to the end of September, BMW said net profit fell about 15 percent to 1.45 billion euros ($1.6 billion) as sales fell almost six percent to 30.5 billion euros. Worldwide vehicle deliveries fell 6.3 percent, dragged down by China where they cratered 24.8 percent. The group, which apart from its namesake brand also includes Mini and Rolls-Royce, has promised to shift more of the supply chain for its Chinese vehicles into China to try to regain market share.
Nedeljkovic said BMW was also learning from its Chinese operations when it came to its business in the rest of the world, pointing to experience gained in developing driving assistance software with local partner Momenta. “There’s a very intense exchange we have with our business in China,” he said. “The learning and technology transfer goes in both ways, as far as is legally possible.”
© 2024 AFP
