FRANKFURT, Nov 6 — BMW said today it faced “extraordinary challenges” as its quarterly profits plunged due to slumping Chinese sales and a vehicle recall, the latest sign of the crisis gripping Europe’s auto sector. The German luxury carmaker’s net profit dropped 84 per cent from July to September, and came in at €476 million (RM2.25 billion) — even worse than analysts had been expecting.
Vehicle deliveries for the manufacturer — which also makes the Rolls-Royce and Mini brands — fell 13 per cent from a year ago, and were down about 30 per cent in the key Chinese market. Sales overall fell nearly 16 per cent to €32.4 billion.
The group said there were “extraordinary challenges” in the third quarter, in particular “weak demand in China” as well as problems with a braking system that led to a costly recall of 1.5 million vehicles. Like other German automakers, the Munich-headquartered manufacturer had come to rely heavily on China, and makes around a third of its sales there.
But with the world’s second-biggest economy facing prolonged economic problems and new homegrown rivals challenging traditional European car makers, particularly for sales of electric vehicles, BMW has been hard hit. BMW CEO Oliver Zipse tried to sound upbeat despite the poor results. “In the fourth quarter, we are back on track for stronger earnings in order to achieve our annual targets, despite planned high upfront expenditures,” he said.
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