BMW’s third-quarter profits saw a dramatic drop of 84% year-on-year, landing at €476 million ($512 million), primarily due to technical issues with braking systems and a slump in demand from the Chinese market. The revenue also suffered, decreasing by 16% to €32.4 billion, prompting BMW to revise its financial outlook in September.
Chairman Oliver Zipse acknowledged the recent setbacks but expressed optimism, emphasizing that BMW is working toward stronger earnings in the fourth quarter to meet its annual goals despite ongoing investments. The profit slump was largely influenced by expenses related to technical fixes and halted deliveries due to faulty brake systems supplied by Continental. These issues severely impacted BMW’s profit margin in its automotive segment, which fell from 7.5% to a slim 2.3%, compounded by a steep decline in sales within China.
Due to the brake problem, BMW recalled approximately 1.2 million vehicles and suspended delivery of an additional 320,000 cars. Chief Financial Officer Walter Mertl explained that BMW had set aside significant provisions to cover warranty obligations related to these issues. Mertl added that BMW’s global technical measures are progressing well and should enable most cars in stock to be serviced by year-end, setting up a stronger sales outlook for the final quarter.
The Chinese market, once a major growth driver, posed significant challenges as BMW’s sales in the region plummeted by 30%. Mertl attributed roughly half of this decline to the brake-related delivery hold-ups, with the rest due to continued weak demand and price volatility. To support dealers, BMW has introduced discounts and liquidity measures.
Additionally, Zipse expressed concerns over potential tariffs from both the U.S. and EU on imported electric vehicles, warning that such measures might hinder global competitiveness rather than protect it.
Despite these setbacks, BMW’s electric vehicle sector showed resilience, with 17% of sales now comprising battery electric vehicles (BEVs). Zipse highlighted that by 2030, BMW expects over half of its global sales to be electric, largely driven by the fully-electric “Neue Klasse” series, which has already started pre-series production in Hungary.
