'China Effect': average price of new car in Brazil has the first drop in six years With Chinese competition on the rise, falling profits and the popularization of electric vehicles in China, German automobile giants plan tens of thousands of layoffs and review of strategies. BMW announced on Wednesday (29) the cut of up to 8,000 jobs worldwide, becoming the fifth German automaker to announce major staff reductions. The automobile sector is facing increasing pressure from Chinese competition, especially in the electric vehicle segment. According to the Munich-based company, the layoffs will affect around 5% of the global workforce, which totals 154,000 employees. BMW, which also owns the Mini and Rolls-Royce brands, stated that the impact will be greater on operations in Germany. Although it was considered more resistant to Chinese competition, BMW warned last month that its sales in China are falling sharply. The dispute in the electric vehicle market with the Asian giant's automakers reduced the German company's pricing power. BMW logo on vehicle displayed at the Beijing International Auto Show (Auto China), in Beijing, China. Reuters Last year, the automaker's vehicle deliveries in China fell to the lowest level since 2017. In the quarter ended in June, the decline was 30% compared to the same period of the previous year. Tariffs imposed by US President Donald Trump also contributed to the difficulties, along with rising energy prices resulting from the war between the US, Israel and Iran and the expansion of Chinese manufacturers in other key markets, including Europe, Asia-Pacific and Latin America. On Thursday, the company reported that net profit for the second quarter fell 35%, to 1.2 billion euros (R$7 billion), while revenue fell from 34 billion (R$199 billion) to 31 billion euros (R$181 billion). BMW revised its forecasts for the remainder of the year and warned of a "significant decline" in profits. Not even Porsche escapes Two days earlier, Porsche announced plans to cut another 5,000 jobs in Germany by the end of 2035. The number corresponds to around one in every five company employees. The sports car maker said the new measures will affect its main factory in Stuttgart-Zuffenhausen and its research and development center in neighboring Weissach. Porsche factory in Zuffenhausen, Germany Disclosure / Porsche Last year, Porsche had already predicted the elimination of 1,900 jobs in the region by 2029 and the termination of 2,000 temporary contracts. The company will also postpone salary increases, while performance bonuses will become more directly linked to profits. Porsche, which belongs to the Volkswagen Group but operates with a high degree of independence, has also reduced vacancies at its Leipzig factory and is closing three subsidiaries that employ around 500 people. At the end of last year, Porsche had almost 41,800 employees, of which around 85% were in Germany. Deep cuts at Volkswagen Volkswagen, Europe's biggest automaker, last month doubled its staff reduction program and announced plans to eliminate up to 100,000 jobs. The company also plans to close four factories in Germany. The unions and the state of Lower Saxony, which holds 20% of voting rights in the company and has veto power over strategic decisions, rejected the new plans. Initially, Volkswagen had announced that it would reduce 50,000 jobs. The automaker is known for its inflated workforce, with around 630,000 employees worldwide, or 680,000 if Chinese joint ventures are considered. The Wolfsburg-based group employs approximately 60% more workers than Toyota, despite producing a similar number of vehicles. The large contingent of employees, once seen as a symbol of German industrial strength, has become a financial burden in the face of intensifying competition from Chinese electric vehicle manufacturers. Volkswagen ID electric vehicle. UNYX 08 on the production line at the Volkswagen Anhui factory, in Hefei, China. REUTERS/Florence Lo/File photo Volkswagen maintains more production stages internally than its competitors, which increases the demand for labor. Furthermore, production costs in German factories are often up to twice as high as those of their rivals. The company's slow progress in the electric vehicle segment also weakened its sales in China, a market that already represented a third of global deliveries, in addition to Europe. Mercedes reduces staff without layoffs In March last year, Mercedes-Benz agreed with its works council on a plan to save 5 billion euros (R$29 billion) by 2027. However, the company ruled out compulsory layoffs in its German factories, arguing that voluntary departures would be sufficient to implement the changes. Until March this year, around 5,500 employees in the administrative, research and development and information technology areas had joined layoff programs. Production workers remained protected. Last month, Mercedes postponed the payment of a bonus to almost three-quarters of its workforce in Germany until 2027 and proposed increasing weekly working hours from 35 to 40 hours without a pay increase. Mercedes-Benz VLE Disclosure / Mercedes-Benz Company executives indicated that some functions may be transferred to other countries. Staff reductions were also reported in the automaker's operations in China. On Tuesday, Mercedes said it had recorded write-downs of more than 700 million euros (R$4 billion) due to strong competition in China. Although the second quarter's net profit grew 13.5%, reaching 1 billion