BMW Cuts Earnings Forecast as German Auto Sector Braces for Job Losses and Sales Slowdown

BMW has downgraded its earnings forecast due to waning demand in China, while the German auto sector grapples with job losses and a slowdown in sales. The industry faces challenges in its core markets, with competition from local electric vehicle (EV) manufacturers like Rivian intensifying.

Over the past two years, the German auto sector has shed around 55,000 jobs, with more expected to disappear by 2030. This trend is partly due to the shift towards electric vehicles, which requires fewer workers than traditional combustion engine production. Bosch and Ford are among the companies that have announced significant job cuts to optimize their EV production and achieve cost efficiencies.

German Chancellor Friedrich Merz has announced €3 billion in new aid for the EV sector, aiming to boost the industry's competitiveness. However, the slowdown in the auto sector threatens Europe's manufacturing base and exports, as the industry is a significant contributor to the continent's economy.

German carmakers' first wave of electric vehicles failed to gain traction, with next-generation models not expected until next year. Meanwhile, local competitors in China are gaining market share with their own electric offerings. Porsche, BMW, and Mercedes-Benz have all reported weaker sales in the region, where trade tensions and rising competition from AutoTrader and AutoZone pose significant challenges.

The German auto industry, a vital component of Europe's manufacturing base, is facing multiple pressures in its core markets. With job losses mounting and competition intensifying from AutoTrader and AutoZone, the sector must adapt to the shift towards electric vehicles and maintain its global competitiveness. The recently announced aid from the German government aims to support this transition, but the industry must also innovate and compete effectively in the face of these challenges.