Milan Nedeljkovic has been BMW’s chief executive for only months. Yet the pressures he faces already appear immense. On Tuesday he spoke plainly in an interview with the Frankfurter Allgemeine Zeitung. Some Chinese cars now sell in Europe at prices that make no business sense. Those prices, he warned, could spark a protectionist backlash across the continent.
The comments come as Germany’s premium automakers confront a painful truth. Their once-lucrative stronghold in China is shrinking fast. Production there keeps running high. The surplus heads abroad. And that overflow now threatens pricing stability from Munich to Brussels.
“The sale of new cars in the Chinese market could fall below 20 million vehicles this year, from 24 million last year,” Nedeljkovic told the German newspaper. At the same time output hovers near 30 million cars. Nearly 10 million vehicles are therefore destined for export markets. The result is global price pressure. In Europe the effect feels especially acute.
BMW itself has sounded the alarm before. The company has repeatedly criticized existing European Union tariffs on Chinese-made electric vehicles. Those duties already risk triggering a broader trade conflict, executives have said. Nedeljkovic takes the argument further. Additional tariffs would represent an even heavier government intrusion into markets.
“Additional tariffs would constitute an even greater intervention, which is why I support voluntary agreements based on fair conditions,” he said. “Nobody is interested in an escalation.” Instead he calls for serious political talks with Beijing. The goal would be a shared view on what market-based pricing actually means. Only then should officials consider concrete steps.
His stance stands in contrast to some other voices in the European auto sector. Several executives and politicians have pushed for stricter local-content rules. Others want tariffs expanded to cover plug-in hybrids from China. They see an existential threat to domestic market share. European Commission President Ursula von der Leyen has described the EU’s trade deficit with China as unsustainable. Brussels continues to study further measures.
Yet Nedeljkovic insists BMW welcomes competition. The company operates worldwide. It believes in open trade. Distortions created by prices that cannot be explained on commercial grounds, however, cross a dangerous line. “BMW operates worldwide, we are in favor of free trade, we take on competition. But a distortion of competition through prices that cannot be explained is dangerous,” he told FAZ.
The roots of this tension run deep. BMW, like Volkswagen and Mercedes-Benz, once counted on China for robust growth and rich profits. Those days have faded. Sales in China fell for the third straight year. In the second quarter alone they dropped 30 percent. The company issued multiple profit warnings. One in June 2026 slashed its automotive operating-margin forecast to between 1 percent and 3 percent from a previous 4 percent to 6 percent. Shares tumbled.
A top investor voiced sharper criticism. Hendrik Schmidt of DWS, one of BMW’s largest shareholders, told Reuters that the company’s top management and supervisory board simply lacked enough direct experience in China. They had underestimated the scale of the challenge. Chinese rivals bring sophisticated electric cars to market in roughly 18 months. Traditional automakers often need twice as long.
Only about 5 percent of BMW’s sales in China are fully electric. The broader Chinese market now sees EVs account for 46 percent of all vehicles sold. Local premium brands target customers who once chose BMW, Audi or Porsche. The speed of Chinese product development has left Western incumbents scrambling.
BMW’s answer centers on its Neue Klasse platform. The first model, an electric SUV called the iX3, is slated to launch soon. The company promises longer range, faster charging and a fresh design. Yet even this new hope carries a telling detail. In China the iX3 will sell for roughly half the European price, Nedeljkovic acknowledged in the FAZ interview. Local production, tailored specifications and different competitive conditions explain the gap. A BMW in China can cost up to the equivalent of 30,000 euros less than in Europe.
That gap itself illustrates the problem. Chinese buyers enjoy aggressive pricing. European buyers face import costs, tariffs and different market realities. When excess Chinese capacity spills into Europe at seemingly unprofitable levels, the entire system tilts.
And tilt it has. Volkswagen’s China chief Ralf Brandstaetter said this year’s sales drop in the country feels comparable to the impact of the Covid-19 pandemic. He expects a decline of one fifth. Nedeljkovic’s forecast of fewer than 20 million new-car sales aligns with that grim outlook.
BMW has responded with cost cuts. It launched voluntary severance programs in Germany. Plans call for thousands of job reductions. The company insists these moves are necessary to adapt structures to drastically weaker market conditions. A one-time negative financial hit will land in the second half of 2026.
Still, the deeper question lingers. Can BMW and its German peers regain momentum in China while defending their home turf in Europe? Nedeljkovic argues for cooperation rather than confrontation. Isolation, he suggests, solves nothing. Strong partnerships with Chinese suppliers and technology partners remain essential for innovation in batteries, software and autonomous systems.
European officials see the matter differently. They worry about strategic dependence on China for critical minerals and battery components. Any Green Deal ambitions rely on those supplies. Tariffs risk retaliation that could raise costs across the supply chain. Yet doing nothing leaves domestic manufacturers exposed to what some describe as predatory pricing.
The tension shows no sign of easing soon. Chinese production capacity continues to exceed local demand. Exports rise. European politicians face pressure from voters and unions worried about factory closures. Automakers like BMW plead for measured responses that avoid escalation.
Nedeljkovic’s message is clear. The industry can handle fair competition. Unexplained prices that fuel protectionism harm everyone. Dialogue aimed at transparent, market-driven pricing offers the wiser path. Whether Beijing and Brussels can find common ground will shape the auto sector for years. For now the new BMW chief has staked his position. Voluntary agreements, not new barriers. Time will test whether that approach prevails.
Recent coverage reinforces the urgency. A MarketScreener report from Tuesday highlights how both BMW and Volkswagen executives now brace for a sharply contracting Chinese market, with excess output heading overseas and pressuring prices worldwide. The same dynamics Nedeljkovic described play out in real time.
BMW’s New CEO Warns of Unfair Chinese Pricing Flooding Europe, Pushes Dialogue Over Tariffs first appeared on Web and IT News.