More speed, more efficiency: BMW Group realigns for tougher competition – AutoMart Canada

Munich. The BMW Group is maintaining a clear course
in an increasingly competitive environment: Faced with a significant
downturn in the Chinese market and an increasingly challenging
operating environment worldwide, the company is accelerating and
intensifying consequently measures to tackle enduring changes in the
operating environment. As an initial and decisive step, the BMW Group
has reached an agreement with the Works Council on an extensive
workforce restructuring program including voluntary severance packages.

“The automotive industry is faced with rapidly escalating challenges
– intense global competition, increasing regional regulatory
requirements and the implications of geopolitical conflicts will shape
our business model in the years ahead. That’s why it’s important to be
lean and agile,” said Milan Nedeljković, Chairman of the Board
of Management of BMW AG. “We are working to reshape our
organisation and processes, thereby positioning the company to stay
competitive going forward.”

In the second quarter, the sharply negative market development in
China, intensified competition, particularly in the Asia-Pacific
region, and the consequences of the continuing conflict in the Middle
East clearly impacted the BMW Group’s business performance. Group
pre-tax earnings (EBT) came in at €1,697 million (-35.1%) with an EBT
margin of 5.4%; in H1, it was 6.5% (H1: €4,045 million; -29.4%). The
EBIT margin in the Automotive Segment was 2.3%. Free cash flow in the
segment totalled €513 million (-73.4%).

Global deliveries down slightly year-on-year; growth in Europe
and the US

The BMW Group delivered a total of 1,156,727 BMW, MINI and
Rolls-Royce vehicles to customers worldwide in the first six
months of the year (2025: 1,207,594 vehicles/-4.2%; in Q2: 590,947 vehicles/-4.9%).

The company reported growth in the first half of the year in the
Sales Region Europe and in the USA (Europe: +5.4%; USA: +3.9%). Growth
in both regions increased further in the second quarter (Europe:
+7.6%; USA: +11.9%).

In the Sales Region China, the negative trend accelerated during the
reporting period. The BMW Group also recorded a significant decrease
in deliveries (H1: 261,773 units/-20.4%; Q2: 117,815 units/-30.2%).

MINI brand deliveries increased significantly during
the reporting period, with growth of +17.1% and 81,032 vehicles
delivered in the second quarter (2025: 69,223 vehicles/+17.1%; H1:
149,535 units; 2025: 133,838 units/+11.7%). Its fully-electric models
contributed to this sales growth: Accounting for 36.9% of the brand’s
total deliveries, more than one in every three MINIs sold in the first
six months was fully electric (2025: 34.3%).

The BMW Group delivered a total of 116,807 fully-electric
vehicles between April and June (2025: 111,070
vehicles/+5.2%, H1: 204,295 vehicles/-7.4%). As a result, nearly one
in five vehicles delivered was fully electric (19.8%). In the Sales
Region Europe, the positive sales performance continued following the
launch of the BMW iX3* in early March: In the second quarter of 2026,
total BEV sales in this region reached 81,500 vehicles, an increase of
37.9% compared to the previous year. Nearly one in three new vehicles
delivered was fully electric (31.3%/2025: 24.4%).

Demand for the Neue Klasse continues to grow with
every new model introduced: The BMW iX3, the first
model of the Neue Klasse, is fully on track to reach the milestone of
100,000 orders since its sales launch.

The second Neue Klasse model, the BMW i3, has
equally recorded strong demand immediately following the start of the
early ordering phase for the Launch Edition in June. Since their world
premieres, the BMW 7 Series and the all-new
BMW X5 have received extremely positive feedback.
The new X5 will make the technologies of the Neue Klasse available in
five drive train variants to deliver on different customer
requirements worldwide.

 

“With the Neue Klasse and its technologies, we are bringing a strong
product portfolio to market – innovative and at the forefront of
technology. Customer feedback has been excellent, and demand remains
consistently strong,” said CEO Nedeljković.

 

Lower Group revenues year-on-year – cost reduction achieved

For the first six months of 2026, the BMW Group reported
revenues of €62,266 million (2025:
€67,685 million/-8.0%,adjusted for currency
translation effects -6.1%; Q2: €31,259
million (2025: €33,927 million/-7.9%,
adjusted for currency translation effects -7.8%). Increased
competitive pressure and lower sales volumes impacted the year-on-year comparison.

Research and development expenditure was further
reduced, as planned, declining moderately year-on-year to
€3,714 million in the first six months (H1
2025: €4,020 million/-7.6%; Q2:
€1,959 million; 2025: €2,036 million/-3.8%). 

As planned, capital expenditure was also
significantly lower, amounting to €1,900 million for
the first half of the year and €1,277 million in the
second quarter (H1 2025: €2,736 million/-30.5%; Q2
2025: €1,534 million/-16.7%). The capex ratio for the
first half-year came in at 3.1% (2025: 4.0%;
Q2: 4.1%; Q2 2025: 4.5%).

As planned, the BMW Group also achieved a further moderate reduction
in sales and administrative expenses, with costs
declining to €4,777 million for the year to the end
of June (2025: €5,089 million/-6.1%; Q2:
€2,509 million; 2025: €2,700 million/-7.1%).

“Competition in the global automotive market has sharpened
noticeably. Following cost savings of €2.5 billion last year, we are
intensifying and accelerating our efficiency measures while
implementing targeted structural measures. Our goal is to reduce
complexity and establish a sustainably lower cost base,” said
Walter Mertl, Member of the Board of Management responsible for
Finance. “The targeted use of digitalisation and artificial
intelligence is already generating positive momentum across all areas
of the company. For example, within our Development division, we use
industrial data combined with artificial intelligence to achieve
shorter cycles in virtual vehicle validation, therefore unlocking
greater data-driven value creation.”

 

Group half-year EBT margin at 6.5%

Group earnings
before tax for the reporting period were
significantly lower than the previous year, totalling €4,045
million (2025: €5,727 million/-29.4%; Q2:
€1,697 million; 2025: € 2,614
million/-35.1%). The EBT margin for
the first half of 2026 stood at 6.5% (2025: 8.5%/-2.0
percentage points/Q2: 5.4%; 2025: 7.7%/-2.3
percentage points).

In the Automotive Segment, lower sales volumes and
intense competition weighed on revenue performance. During the first
six months, Automotive Segment revenues declined
moderately year-on-year to €54,321 million (2025:
€58,654 million/-7.4%, adjusted for currency translation effects
-5.4%; Q2: €27,162 million/2025: €29,443
million/-7.7%, adjusted for currency translation effects -7.8%).

Earnings before financial result (EBIT) for the first
half of the year amounted to €
1,974 million (2025: €3,626 million/-45.6%;
Q2: € 629 million; 2025: €1,602 million/-60.7%).
Compared with the same period of the previous year, earnings were
impacted by the negative market development in China, increased
depreciation and amortisation, as well as currency and commodity
headwinds, which could only be partially offset by cost reductions. 

The EBIT margin for the second quarter came in at
2.3% (Q2 2025: 5.4%; H1: 3.6%;
2025: 6.2%). This includes headwinds of around 1.25 percentage points
from expenses related to import duties (USA, EU), as well as around
1.2 percentage points from depreciation and amortisation of
BBA assets resulting from the purchase price allocation.

 

Free cash flow of €1,290 million in first half-year

The Automotive Segment’s free cash
flow for the first six months totalled €1,290 million
(2025: €2,345 million/-45.0%; Q2: €513
million; 2025: €1,932 million/-73.4%). A free cash flow of
>€2.5 billion is projected for the full year.

 

Financial Services Segment sees growth in new contracts

In the Financial Services Segment, the number of
new financing and leasing contracts increased by
5.0% to 866,088 contracts (2025:
824,672 contracts; Q2: 445,876 contracts; 2025: 421,861 contracts/+5.7%).

The penetration rate rose to 52.9%
(2025: 43.7%; Q2: 54.2% (2025: 44.4%).

For the year to the end of June, the segment reported profit
before tax (PBT) of €
1,008 million (2025: €1,192 million/-15.4%). The
year-on-year decline was attributable to an increase in the provision
for a UK customer compensation programme in the first quarter. In the
second quarter, substantially due to the higher portfolio volume and
the resulting increase in interest income, Financial Services reported
a significantly higher profit before tax of €627
million (2025: €542 million/+15.7%).

 

Guidance for 2026 confirmed

Against the backdrop of the challenges outlined above, the BMW Group
confirms its guidance for the financial year 2026:
Slight decline
in Automotive Segment deliveries compared to the previous year

• Automotive Segment EBIT margin: within the range of 1–3%
• Group earnings before tax: significant decrease
• Automotive Segment RoCE: within the range of 1–5%
• Return on equity (RoE) in the Financial Services segment: 13-16%
• Motorcycles segment: deliveries expected in line with previous
  year; EBIT margin expected within a corridor of 4.0–6.0% and RoCE
  within a corridor of 10–14%

 

The BMW Group’s actual business performance may deviate from the
expectations outlined above – for example, due to changes in political
and macroeconomic conditions.

The BMW Group – an overview: IN Q2 2026		IN Q2 2026	IN Q2 2025	Change in %
Deliveries to customers
Automotive1	units	590,947	621,477	-4.9
thereof: BMW	units	508,663	550,839	-7.7
MINI	units	81,032	69,223	17.1
Rolls-Royce	units	1,252	1,415	-11.5
Motorcycles	units	60,112	61,300	-1.9
Employees (as of 31 Dec. 2025)		154,450
EBIT margin Automotive Segment	percent	2.3	5.4	-3.1 %-points
EBIT margin Motorcycles Segment	percent	15.2	14.2	+1.0 %-points
EBT margin BMW Group2	percent	5.4	7.7	-2.3 %-points
Free cash flow Automotive Segment	€ million	513	1,932	-73.4
Revenues	€ million	31,259	33,927	-7.9
thereof: Automotive	€ million	27,162	29,443	-7.7
Motorcycles	€ million	929	961	-3.3
Financial Services	€ million	10,151	9,978	1.7
Other Entities	€ million	3	3	–
Eliminations	€ million	-6,986	-6,458	8.2
Profit before financial result (EBIT)	€ million	1,631	2,661	-38.7
thereof: Automotive	€ million	629	1,602	-60.7
Motorcycles	€ million	141	136	3.7
Financial Services	€ million	647	591	9.5
Other Entities	€ million	-6	-3	–
Eliminations	€ million	220	335	-34.3
Profit before tax (EBT)	€ million	1,697	2,614	-35.1
thereof: Automotive	€ million	559	1,613	-65.3
Motorcycles	€ million	140	136	2.9
Financial Services	€ million	627	542	15.7
Other Entities	€ million	283	177	59.9
Eliminations	€ million	88	146	-39.7
Group income taxes	€ million	-497	-772	-35.6
Net profit	€ million	1,200	1,842	-34.9
Earnings per share of common stock	€	2.05	2.85	-28.1
1 Deliveries include the joint venture BMW Brilliance Automotive Ltd., Shenyang.
2 Ratio of Group earnings before taxes to Group revenues.

 

 

The BMW Group – an overview: In H1 2026		H1 2026	H1 2025	Change in %
Deliveries to customers
Automotive1	units	1,156,727	1,207,594	-4.2
thereof: BMW	units	1,004,669	1,070,960	-6.2
MINI	units	149,535	133,838	11.7
Rolls-Royce	units	2,523	2,796	-9.8
Motorcycles	units	102,847	105,909	-2.9
Employees (as of 31 Dec. 2025)		154,540
EBIT margin Automotive Segment	percent	3.6	6.2	-2.6 %-points
EBIT margin Motorcycles Segment	percent	13.5	12.0	+1.5 %-points
EBT margin BMW Group2	percent	6.5	8.5	-2.0 %-points
Free cash flow Automotive Segment	€ million	1,290	2,345	-45.0
Revenues	€ million	62,266	67,685	-8.0
thereof: Automotive	€ million	54,321	58,654	-7.4
Motorcycles	€ million	1,708	1,767	-3.3
Financial Services	€ million	19,988	20,104	-0.6
Other Entities	€ million	6	6	–
Eliminations	€ million	-13,757	-12,846	7.1
Profit before financial result (EBIT)	€ million	3,635	5,803	-37.4
thereof: Automotive	€ million	1,974	3,626	-45.6
Motorcycles	€ million	230	212	8.5
Financial Services	€ million	1,000	1,243	-19.5
Other Entities	€ million	-4	-9	-55.6
Eliminations	€ million	435	731	-40.5
Profit before tax (EBT)	€ million	4,045	5,727	-29.4
thereof: Automotive	€ million	1,825	3,517	-48.1
Motorcycles	€ million	228	211	8.1
Financial Services	€ million	1,008	1,192	-15.4
Other Entities	€ million	826	472	75.0
Eliminations	€ million	158	335	-52.8
Group income taxes	€ million	-1,173	-1,712	-31.5
Net profit	€ million	2,872	4,015	-28.5
Earnings per share of common stock	€	4.73	6.23	-24.1
1Deliveries include the joint venture BMW Brilliance Automotive Ltd., Shenyang
2Ratio of Group earnings before taxes to Group revenues.

 

 

** As of 1 January 2025, the forecast range for Group EBT has been
adjusted. For details, please refer to the glossary in the BMW Group
Report 2024.

 

GLOSSARY – explanatory comments on key performance indicators

 

Deliveries to customers

A new or used vehicle is recorded as a delivery once it is handed
over to the end user (which also includes leaseholders under lease
contracts with BMW Financial Services). In the US and Canada, end
users also include (1) dealers when they designate a vehicle as a
service loaner or demonstrator vehicle and (2) dealers and other third
parties when they purchase a company vehicle at auction and dealers
when they purchase company vehicles directly from the BMW Group.
Deliveries may be made by BMW AG, one of its international
subsidiaries, a BMW Group retail outlet, or independent third-party
dealers. The vast majority of deliveries – and hence the reporting of
deliveries to the BMW Group – is made by independent third-party
dealers. Retail vehicle deliveries during a given reporting period do
not correlate directly to the revenues that the BMW Group recognises
in respect of that particular reporting period.

 

Payout ratio

The payout ratio is preliminary. Although the Board of Management and
the Supervisory Board will propose a fixed dividend per share at the
Annual General Meeting, the number of shares entitled to a dividend is
expected to fall by the Annual General Meeting due to the ongoing
share buy-back programme. Accordingly, the total amount to be
distributed to shareholders is also still expected to change by 13 May.

EBIT

Profit before financial result. Profit before financial result
comprises revenues less cost of sales, less selling and administrative
expenses and plus/minus net other operating income and expenses.

 

EBIT margin

Profit/loss before financial result as a percentage of revenues.

 

EBT

EBIT plus financial result.

PHEV

Plug-in-hybrid electric vehicle – hybrid vehicle with petrol engine
and electric drive.

If you have any questions, please contact:

 

BMW Group Corporate Communications

 

Dr Britta Ullrich, Finance Communications

Telephone: +49 89 382-18364

Email: britta.ullrich@bmwgroup.com

 

Max-Morten Borgmann, head of Communications BMW Group, Finance, Sales

Telephone: +49 89 382-24118

Email: max-morten.borgmann@bmwgroup.com

 

Media website: www.press.bmwgroup.com/deutschland

Email: presse@bmwgroup.com

 

The BMW Group

With its four brands, BMW, MINI, Rolls-Royce and BMW Motorrad, the
BMW Group is the world’s leading premium manufacturer of automobiles
and motorcycles and also provides premium financial services. The BMW
Group production network comprises over 30 production sites worldwide;
the company has a global sales network in more than 140 countries.

In 2025, the BMW Group sold 2.46 million passenger vehicles and more
than 202,500 motorcycles worldwide. The profit before tax in the
financial year 2025 was € 10.2 billion on revenues amounting to €
133,5 billion. As of 31 December 2025, the BMW Group had a workforce
of 154,540 employees.

The economic success of the BMW Group has always been based on
long-term thinking and responsible action. Sustainability is a key
element of the BMW Group’s corporate strategy and covers all products
– from the supply chain through production to the end of their useful life. 

www.bmwgroup.com

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