Munich spent the last two years as the German industry’s designated adult. While rivals reversed course on electrification and wrote off billions, BMW kept building petrol, diesel, plug-in and battery versions of nearly everything and let everyone else panic. That posture just ran out of road.
On July 30, BMW published half-year results alongside confirmation that it has reached agreement with its Works Council on what the company calls an extensive workforce restructuring programme including voluntary severance packages. CEO Milan Nedeljković — who has held the chairman’s role since May — described it in his conference call remarks as a voluntary severance programme in indirect functions in Germany. Indirect means administration, planning, engineering support. Not the line.
Worth noting up front: BMW has not published a headcount figure in any of its own materials. What it has published is the price tag, and that’s arguably more useful.
Read the guidance, not the headlines
Finance chief Walter Mertl told analysts that BMW’s full-year Automotive EBIT margin guidance of 1 to 3 per cent includes a burden of up to 1.25 percentage points for the restructuring programme.
Do the arithmetic yourself. Automotive segment revenue was €54.3 billion in the first half. Annualise that at the current run rate and you’re looking at something in the neighbourhood of €108 billion for the year, which puts 1.25 points at roughly €1.3 to €1.4 billion in one-off cost. That’s a rough estimate off BMW’s own disclosed figures rather than a company number, but it’s the right order of magnitude — and it tells you this is a serious programme, not a hiring freeze with a press release attached.
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The same statement contains the more interesting decomposition. BMW’s reported Q2 Automotive EBIT margin was 2.3 per cent. Inside that number sit 1.25 points of tariff burden and 1.2 points of depreciation from the BMW Brilliance Automotive purchase price allocation — the accounting hangover from consolidating its Chinese joint venture. Strip both out and the underlying operating margin is closer to 4.75 per cent. Still nowhere near BMW’s stated ambition of returning to an 8 to 10 per cent corridor by the start of the next decade, but a very different story than the headline implies.
China is the wound, and it’s deep
Group deliveries fell 4.2 per cent in the first half to 1,156,727 vehicles. That mild-looking number hides a violent regional split.
Europe was up 5.4 per cent for the half and 7.6 per cent in Q2. The US was up 3.9 and 11.9 per cent respectively. China went the other way: 261,773 units in the first half, down 20.4 per cent, with Q2 collapsing 30.2 per cent. Mertl noted the Chinese market itself contracted 20.2 per cent over the half — so BMW roughly tracked the market rather than losing share, which is cold comfort when the market falls off a cliff.
Because BMW fully consolidates BBA, every bit of that pain lands directly in Automotive EBIT with nowhere to hide. Group pre-tax earnings for Q2 came in at €1,697 million, down 35.1 per cent.
What the technology-open thing actually looks like in numbers
Here’s the part enthusiasts should sit with. In Europe, BMW’s Q2 growth was driven by battery-electric sales, which jumped 37.9 per cent to more than 81,000 units — nearly one in three European deliveries. In the US, growth came from the opposite direction: Mertl said higher deliveries of internal combustion vehicles more than offset lower BEV sales as overall American EV demand fell.
Same company, same quarter, two completely inverted drivetrain stories. Every executive in the industry has spent five years saying “technology openness” as a hedge phrase. This is the first set of results where you can watch it actually pay rent.
Group-wide, BEVs were 19.8 per cent of Q2 deliveries and electrified vehicles 27.6 per cent. MINI is quietly having a great year — up 17.1 per cent in Q2, with 36.9 per cent of first-half sales fully electric.
The line that should worry the spec sheet obsessives
Buried in Nedeljković’s remarks is the sentence that matters most to anyone who configures cars for fun: BMW is re-evaluating which technologies, model variants and drivetrains it will need in the future.
That’s not a jobs story. That’s a product story. When a manufacturer under fixed-cost pressure says “variants,” what historically follows is the quiet death of low-volume bodystyles, duplicated engine-and-gearbox combinations that each carry their own homologation and validation bill, and the odd manual or wagon that survives on internal enthusiasm rather than a business case. Every drivetrain variant carries certification cost in every market it’s sold in, and the new EU framework doesn’t reduce that paperwork — it multiplies compliance pathways.
The counterweight: BMW says 40 new and updated models will have launched by the end of next year. The iX3 is approaching 100,000 orders, Plant Debrecen added a second shift ahead of schedule and has built 50,000 of them in what BMW calls the fastest ramp-up of a new plant in its history, and the fifth-generation X5 arrives with five drivetrain variants. If you want a specific niche configuration, the practical takeaway is straightforward: order windows for oddball specs tend to close before anyone announces they’re closing.
One number nobody’s talking about
BMW Financial Services wrote 866,088 new retail contracts in the first half, up 5 per cent, and its penetration rate climbed to 52.9 per cent from 43.7 per cent a year earlier. More than half of BMW buyers are now financing or leasing through the captive.
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A nine-point jump in a single year is not organic. That’s a manufacturer using its finance arm to support transaction prices — subvented rates instead of hood cash, which protects residual values and the used market in a way discounting doesn’t. The credit loss ratio held at 0.27 per cent, so this isn’t stretching credit quality. If you’re shopping, it means the best money on a BMW right now is likely to be in the finance rate rather than off the sticker.
The wider German picture
BMW is late to this party, not early. Porsche and its General Works Council agreed on a Future Package on July 27 that cuts a further 5,000 jobs by 2035 through attrition, expanded partial retirement and voluntary severance, in exchange for employment and site protection to 2035 and €2.1 billion of cumulative investment at Zuffenhausen and Weissach.
Meanwhile the regulatory ground keeps shifting. The European Commission’s Automotive Package, presented in December 2025, would replace the 100 per cent tailpipe reduction target for 2035 with 90 per cent, with the remaining tenth offset via low-carbon EU-made steel or renewable fuel credits — keeping plug-in hybrids, range extenders and combustion cars legally saleable past 2035. It’s a proposal, not law, and it’s still working through Parliament and Council.
Which is precisely the problem BMW is describing. You can’t cost-optimise a product portfolio when the rule that determines what you’re allowed to sell in 2036 is still being argued over in 2026. Cutting the planning department is what happens when you can’t plan.
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