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| 6 hours ago
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German carmaker BMW suffers a fall in net profit in the third quarter of 2024, mainly due to falling sales in China, its main market.
BMW's net profit plummets 83,8 % compared to the previous year, standing at only 476 million euros compared to 2.9 billion euros in the third quarter of 2023, while Factset analysts expected 1.3 billion euros.
A marked decline in China and Europe
BMW saw its vehicle deliveries decrease by 13% year-on-year between July and September, with a particularly marked drop in China (-30%), where the manufacturer generates around a third of its sales. This slowdown can be explained by the Chinese economic situation, marked by a slowdown in growth, as well as by growing competition from local brands, particularly in the electric vehicle sector.
At the same time, BMW's turnover recorded a drop of 15.7%, reaching 32.4 billion euros for the quarter. This decline in income is also accompanied by a weakening of the operating margin, which falls at 2.6%, far from the 10.6% recorded at the same period in 2023.
Massive recalls and technical problems
In addition to falling sales, BMW faced a braking problem that led to massive vehicle recalls, affecting 1.5 million units. This technical incident caused provisions of several hundred million euros and interruptions in deliveries, worsening the company's financial difficulties.
As a result, BMW was forced to revise its annual guidance, lowering its operating margin forecast for the year from 8-10% to a range of 6-7%.
A sector in tension
BMW's situation is part of a global context of pressure on German car manufacturers. With the rise of the Chinese competition and a slowdown in global demand, major German groups, including Volkswagen and Mercedes, face unprecedented challenges.
Volkswagen, European market leader, notably announced a plan to cut jobs and potential site closures in Germany.
Outlook for the fourth quarter
Despite these disappointing results, BMW remains optimistic for the end of the year. Sales delayed in the third quarter are expected to carry over into the final quarter, which could provide partial relief.
On the other hand, increased competition and pressure on sales of high-end models, usually more profitable, require increased vigilance in a rapidly changing sector.
Hope in the electric vehicle segment
Despite a difficult economic situation, BMW recorded an increase in sales of electric vehicles, up 10% over the quarter.
This segment represents a positive point for the manufacturer, while its competitors, notably Mercedes and Volkswagen, are seeing their sales of electric vehicles stagnate or decline.
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quarterly profit, BMW, Chinese competition, German manufacturer, automobile crisis, Chinese market, operating margin, Mercedes, vehicle recall, automobile sector, electric cars, Volkswagen
