![\"BMW](\"https:\/\/www.europesays.com\/germany\/wp-content\/uploads\/2026\/08\/1785875304_905_0x0.jpg\")
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The BMW iX3 electric SUV on stage during an event ahead of the Beijing Auto Show in Beijing. BMW unveiled the new BMW iX3 Long Wheelbase, the new BMW i3 Long Wheelbase and the new BMW 7 Series featuring Neue Klasse technologies. Photographer: Qilai Shen\/Bloomberg<\/p>\n
\u00a9 2026 Bloomberg Finance LP<\/p>\n
German automakers in general and BMW<\/a> in particular are stumbling as Chinese manufacturers outcompete them in the premium market they once dominated, according to a report from Professor Ferdinand Dudenhoeffer\u2019s Center for Automotive Research<\/a>. <\/p>\n The German automotive business model no longer works, according to the report. <\/p>\n Radical changes are required by BMW, and a major shareholder meeting planned for late September, will show whether management has a credible path back to growth\u2014or whether deeper structural problems lie ahead.<\/p>\n \u201cThe \u201cChina Problem\u201d is not unique to BMW; it is a challenge facing all German automakers. The old business model \u2013 developing a car in Germany then building a long-wheelbase version in China a year later \u2013 no longer works. VW appears closest to a solution, whereas, in our assessment, BMW is still a long way off,\u201d Dudenhoeffer said in the report.<\/p>\n This will come as no surprise to BMW shareholders. The share price has slid almost 40% this year as it became clear that what had been almost a license to print money in China was reversing, while the Sino threat gathered pace in Europe. <\/p>\n BMW investors had hoped that only lesser mass-market breeds like Renaults, Fiats, Peugeots and VW\u2019s own brand would succumb to Chinese value-for-money temptations. The thoroughbreds of Porsche, Audi, Mercedes and BMW surely would not be threatened by names like Hongqi, Yangwang, NIO and Zeekr. But a BMW iX3 or Porsche Panamera lookalike at 30 to 50% off will turn the heads of the most patriotic Europeans.<\/p>\n Long- term profit target still 8 to 10%<\/p>\n Oliver Zipse, former chief executive officer of BMW AG, at the Beijing Auto Show. BMW unveiled the new BMW iX3 Long Wheelbase, the new BMW i3 Long Wheelbase and the new BMW 7 Series featuring Neue Klasse technologies. Photographer: Qilai Shen\/Bloomberg<\/p>\n \u00a9 2026 Bloomberg Finance LP<\/p>\n And all this pressure has taken its toll on BMW\u2019s finances. In the second quarter pre-tax profit fell 35% to \u20ac1.7 billion ($2 billion), while the operating margin for the core automotive business narrowed to 2.3% from 5.4% in the same period last year. BMW restated its 2026 forecast of an operating margin of between 1 and 3%. In June, BMW warned about a threat to its profit targets. Some investors may remember that the long- term profit target was 8 to 10%, but it will take until the next decade to return to that, BMW said.<\/p>\n BMW also announced a plan to cut about 8,000 jobs, around 5% of the workforce. Volkswagen wants to cut 100,000 jobs and shut 4 factories. <\/p>\n In a report entitled \u201cBMW and the German Auto Industry \u2013 The China Problem\u201d, Dudenhoeffer said losing sales in China is not an immutable law of nature.<\/p>\n \u201cTesla, for instance, managed to increase its sales in China by over 100,000 units in the first half of the year with its ageing Model 3 and Model Y, without a vast model lineup or a religious devotion to \u201ctechnology neutrality\u201d, but with a compelling price-to-value ratio,\u201d Dudenhoeffer said. <\/p>\n \u201cToo expensive, too slow, lacking modern tech\u201d<\/p>\n \u201cIn the first half of 2026, BMW lost exactly 56,352 vehicle sales in China compared to the same period of 2025. These losses are not a one-off event but part of an ongoing pattern; the pattern began in 2023. The root cause is not Donald Trump, tariffs, or other macroeconomic factors, but rather \u2013 in our assessment \u2013 the German auto industry\u2019s business models, which apparently no longer works,\u201d he said.<\/p>\n \u201cToo expensive, too slow, lacking modern tech,\u201d Dudenhoeffer said.<\/p>\n Pedro Pacheco, auto analyst with consultants Gartner, said this applies to the Germans generally.<\/p>\n \u201cThey (the Germans) are losing big in China and they may not be able to recover there anymore,” he told Politico<\/a>.<\/p>\n Analysts don\u2019t seem too bothered by BMW\u2019s prospects. Investment researcher Bernstein rates BMW shares \u201cOutperform\u201d and a report entitled \u201cBMW: The rebuilding process\u201d talks about the negative developments in China. These could not be offset by positive volume developments in Europe and the U.S. Middle East turmoil was lasting longer than expected. This was undermining global consumer sentiment.<\/p>\n Bernstein acknowledged the eventual beneficial impact of cost-cutting, and BMW\u2019s review of its suppliers.<\/p>\n Building blocks expected<\/p>\n A Xiaomi staff member wearing a jacket with a map of the Nurburgring racing circuit stands next to a Xiaomi SU7 Ultra during a Xiaomi track day driving experience in Tianjin, in northern China. (Photo by GREG BAKER \/ AFP via Getty Images)<\/p>\n AFP via Getty Images<\/p>\n “We expect to hear more about the building blocks towards that long term margin target (8 to 10%) at BMW\u2019s upcoming CMD in September,\u201d Bernstein said. <\/p>\n BMW is holding a so-called Capital Markets Day to inform investors of its long-term plans on September 29 and 30.<\/p>\n Investment researcher Jefferies rates BMW shares as a \u201chold\u201d.<\/p>\n \u201cAt stake for BMW (at the CMD) are how to restore attractive profitability of course, as well as a reputation earned through years of thoughtful strategic decisions and a track record of few mistakes. Investors will seek new capital allocation (more cash returns) while the debate may be more about capital efficiency,\u201d Jefferies said in a report.<\/p>\n Topics will include \u2013 <\/p>\n New relationships with suppliersShrinking is not an option \u2013 BMW has consistently stressed growth as essential to productivity. Will this come from Autos or other sources?Roadmap to 8-10% – Can Neue Klasse reduce costs.Resizing or re-purposing China. Strengthening U.S. \u2013 localizing engines in the U.S. makes sense because their future in Europe looks uncertain.<\/p>\n BMW\u2019s Neue Klasse is a multi-billion-euro technological overhaul designed to reshape the entire vehicle portfolio. Focused on electrification and digitalization, the program underpins over 40 upcoming models, starting with the electric iX3 SUV<\/a> and i3 sedan.<\/p>\n But CAR\u2019s Dudenhoeffer expects BMW\u2019s decline to continue in the coming quarters.<\/p>\n Business model not viable<\/p>\n \u201cThe business model \u2013 characterized by high development costs and a vast product range in Germany, followed by production in a Chinese BMW plant \u2013 is no longer viable. China has become the new benchmark in the automotive world; success requires adhering to the rules of the Chinese market.\u201d <\/p>\n \u201cThe new standards include \u201cChina speed\u201d, streamlined model lineups, digital-first cockpits and interiors, advanced driving functions such as Navigation on Autopilot, that are continuously improved via AI, and constant battery innovation within China. Giga-casting is being employed not only by Tesla but also, naturally, by Xiaomi and others,\u201d Dudenhoeffer said.<\/p>\n And then there are China prices. Dudenhoeffer said the starting price of an Xiaomi equivalent of the BMW iX3 is less than \u20ac30,000 ($34,600). The Neue Klasse iX3 starts at \u20ac63,400 ($73,100) in Europe. VW\u2019s \u201cIn China, for China\u201d strategy makes sense with partnerships with Xpeng<\/a> and semiconductor firm Horizon Robotics<\/a>, he said.<\/p>\n \u201cBMW\u2019s decision to cut 8,000 jobs offers a brief respite, but nothing more. That approach worked in the past, but not today, because China is the new home of the car of the future. BMW needs to reinvent itself \u2013 right there in China,\u201d Dudenhoeffer said.<\/p>\n BMW has been asked to comment.<\/p>\n","protected":false},"excerpt":{"rendered":"The BMW iX3 electric SUV on stage during an event ahead of the Beijing Auto Show in Beijing.…\n","protected":false},"author":2,"featured_media":66771,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20955],"tags":[38193,6213,89,6294,151,50162,76,39830,50163,8369],"class_list":["post-66770","post","type-post","status-publish","format-standard","has-post-thumbnail","category-bmw","tag-bernstein","tag-bmw","tag-china","tag-chinese","tag-europe","tag-ferdinand-dudenhoeffer","tag-german","tag-jefferies","tag-restructure","tag-vw"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/posts\/66770","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/comments?post=66770"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/posts\/66770\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/media\/66771"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/media?parent=66770"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/categories?post=66770"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/germany\/wp-json\/wp\/v2\/tags?post=66770"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}