China is the German manufacturer's main market, its sales there fell by 30% over the period.
The German manufacturer BMW reported on Wednesday a net profit in the third quarter divided by 6 over a year, weighed down by the fall in sales, particularly in China, and by the recall of defective components which delayed deliveries.
Between July and September, it generated a net profit of 476 million euros, a drop of 83.8% over one year, the manufacturer said in a press release, in a context of crisis in the automotive sector in Europe.
After BMW, Mercedes warns in turn – 09/20
This is even worse than what the consensus of experts surveyed by Factset predicted, which expected a net result of 1.3 billion euros, or almost triple.
The cause: the fall in car deliveries, of 13% over one year, especially in China (-30%), its main market, where BMW achieves almost a third of its sales.
The Chinese economy, where growth is running out of steam, is not conducive to consumer purchases. Furthermore, German manufacturers are facing increasing competition from local brands, especially in the electric sector.
The group's turnover fell by 15.7% to stand at 32.4 billion euros.
Many reminders
This drop in sales is also due to a defective braking system which led to recalls and stopped deliveries affecting 1.5 million vehicles.
This incident forced BMW to undertake “technical actions” and provisions of several hundred million euros.
These difficulties forced BMW to publish a profit warning at the end of September and to review its annual objectives.
Another concern: the range of products sold has been unfavorable with sales of the most expensive, most profitable models declining.
As a result, the premium car maker's operating margin fell to just 2.6% from 10.6% in the third quarter of last year, close to that of the Volkswagen brand at 2% in 2024.
In September, the group revised its operating margin target for 2024 downwards, aiming for a margin of between 6 and 7%, compared to 8 and 10% previously.
Pressure on German manufacturers
Delayed sales should, however, boost the fourth quarter, assures BMW.
A clarification on these sluggish results: sales of electric cars, which continue to increase at BMW (+10%), while they plunge at Mercedes and Volkswagen.
All German manufacturers and equipment suppliers are subject to the double pressure of falling demand and increasing Chinese competition.
These poor results are published in a context of tension in the sector, while many equipment suppliers and automobile manufacturers have announced massive social plans.
Among them, the Volkswagen group, number 1 in Europe among manufacturers, created a shock by announcing plans for massive job cuts in Germany at the beginning of September and threatening to close factories.
