AutoBeta(AutoBeta.net)11/28 Report--

BMW Group CEO Zipze said management and unions had reached an agreement on cost-cutting measures to "avoid drastic measures". Under the agreement, BMW will slash bonuses and extend the working hours of some employees. The measure will come into effect in 2020.

BMW Group said it aims to save more than 12 billion euros ($13.23 billion) by 2022 to cope with the cost of electrification transformation and self-driving technology.

In fact, as early as March this year, BMW Group proposed a cost-cutting plan of 12 billion euros, which will achieve faster and more streamlined processes and structures to improve efficiency.

In September, BMW revealed plans to cut 6000 jobs in Germany by 2022 as part of its cost-saving measures. But instead of forcing layoffs until 2020, cost savings will be achieved by reducing the working hours of 5700 professional employees from 40 to 35 hours a week.

In addition, in order to cut costs, BMW also plans to eliminate the resulting models and reduce its research and development time to 1/3. Peter, chief financial officer of BMW Group, said: the auto industry is undergoing a rapid transformation and sustained high profit margins are essential if we are to continue to drive change.

The cost reduction is mainly due to the increase in electrified R & D costs. According to BMW Group's results for the third quarter of 2019, BMW Group's profit before interest and tax rose from 1.72 billion euros (13.34 billion yuan) to 2.29 billion euros (17.76 billion yuan) in July-September 2019. The operating margin of its auto division rose to 6.6% from 4.4% in the same period last year.

In addition to BMW, Audi and Mercedes-Benz have also stepped up cost-cutting.

On November 26th Audi issued a statement announcing that it would cut 9500 jobs, or about 10 per cent of its workforce, by 2025. This will save Audi 6 billion euros in costs over the next decade, which will be invested in electrification and digital development.

In addition, Dusman, the former global head of procurement and suppliers for BMW, will join Audi as chief executive by April next year. Dussman will formally push forward the process of layoffs and strive to eliminate the impact of the "emissions gate" scandal.

Daimler also officially announced cost-cutting plans in November. Daimler plans to cut costs by about $1.1 billion by 2021 and cut 1100 management jobs worldwide.

It is understood that Daimler has issued profit warnings many times because of product recalls and fines caused by the "emission gate" scandal. In the second quarter of this year, Daimler posted a net profit loss of $1.3 billion, its first loss since 2009.

Half a month's time, BBA announced all the cost reduction and efficiency plans, enough to see the severity of the current market. In the auto industry downturn led to a continuous decline in sales environment, in addition to BBA, Nissan, Hyundai and other auto companies have announced layoffs and cost-cutting plans.

As many regions have made plans for the exit time of fuel vehicles, more and more car companies have begun to devote themselves to the development of electrification in order to compete for the market. Electrification and self-driving will increase the cost of car companies. At present, the goal of reducing costs and efficiency has been achieved through layoffs and production lines, which may become the most direct and effective way for major car companies to deal with the market environment.

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