On October 7th, due to the continuous weak sales in the Chinese market, BMW lowered its full-year profit expectations, highlighting the challenges faced by European luxury car manufacturers in dealing with the Chinese market.
Based in Munich, BMW stated that global car deliveries in the third quarter increased by 8.8% to 588,300 vehicles, with a 25% growth in the U.S. market, a 9.3% growth in the European market, but a 0.4% decline in the Chinese market. Sales for the first nine months of this year have dropped by 11.2%.
The company anticipates that its pre-tax profit for 2025 will be slightly lower than last year’s 10.97 billion euros, ranging between 5% to 6%, which is at the lower end of previous expectations.
BMW mentioned that due to disappointing performance in the third quarter, the company has adjusted its sales expectations for the remaining time in China for this year.
In addition, BMW will also reduce its expectations for free cash flow in the automotive business, with the latest projection of free cash flow being around 2.5 billion euros, lower than the previous expectation of up to 5 billion euros. The downward adjustment in cash flow expectations is mainly due to increased payment outlays to dealers, especially in China.
In recent years, with the ongoing economic downturn, Chinese consumers have swiftly shifted towards lower-priced domestic electric vehicles, posing increasingly significant challenges for German luxury car manufacturers such as Mercedes-Benz and BMW in the Chinese market.
On the same day, BMW’s German competitor Mercedes-Benz also announced a significant decline in car sales in China for the third quarter, with a drop of 27%.