BMW Q3 Sales Decline Due to Weakness in China and Challenging Market Conditions

BMW has experienced a 13% drop in third-quarter sales due to declining demand in China and a challenging global market. The German luxury car manufacturer reported automotive sales of 540,882 units for the quarter. Year-to-date sales also fell by 4.5%, totaling 1,754,158 units.

The company’s performance was significantly impacted by a recall affecting over 1.5 million vehicles worldwide, related to braking system issues. BMW had previously lowered its profit and sales forecasts for the 2024 fiscal year, anticipating a financial hit in the “high three-digit million euro range” for the third quarter due to these issues.

A BMW spokesperson revealed that the braking system problem was first detected during an internal quality check, leading to an initial recall in February. However, subsequent cases beyond the original recall scope have also been reported.

The automaker also highlighted a “difficult market environment” in China, where sales plummeted by 29.8% to 147,691 units in the third quarter and decreased by 13.1% to 523,638 units for the year through September. The recall is expected to affect around 370,000 vehicles in China.

In light of the recall expenses and performance in China, BMW adjusted its full-year earnings before interest and taxes margin outlook for the automotive segment to 6% to 7%, down from the prior range of 8% to 10%. The company also anticipates a slight decline in worldwide deliveries for 2024, contrary to previous expectations for a slight increase.

Despite these challenges, BMW’s Board of Management member Jochen Goller noted that the company’s fully-electric vehicles are gaining traction, with a 19.1% rise in sales of battery-powered EVs in the first nine months of the year. Sales in Europe also saw growth during this period.

Following the announcement, BMW shares showed little movement in early European trading.