LONDON/FRANKFURT (Reuters) -BMW quarterly profit dropped by 61% in the third quarter, missing analyst expectations due to weak China sales and brake issues. This caused the company’s shares to fall to their lowest point in over two and a half years. #BMWQuarterlyProfit
Shares of BMW, along with its German competitors Volkswagen, Mercedes-Benz, and Porsche, fell by 3%-5%. Traders noted concerns over the potential U.S. presidential victory of Donald Trump, who has threatened broad tariffs on imports.
Investment strategist Juergen Molnar from RoboMarkets stated that while BMW primarily blamed weak Chinese sales, Trump’s proposed tariffs could add more challenges to the already struggling car industry.
BMW CEO Oliver Zipse reassured stakeholders, emphasizing the U.S. market’s importance. He suggested that potential U.S. tariffs might lead BMW to increase local sales in response to changing circumstances.
“We shouldn’t be too nervous about what might happen,” Zipse told journalists, pointing to BMW’s “very, very large footprint” in the United States but also highlighting the ongoing weakness in China.
BMW operates its largest factory in Spartanburg, South Carolina. CEO Zipse also highlighted the company’s presence across 30 locations in 12 U.S. states.
Back in September, BMW lowered its annual forecast, citing weak Chinese demand and issues with a braking system supplied by Continental.
In October, BMW revealed that its third-quarter sales in China had dropped by a third, reflecting ongoing challenges in the market.
Volkswagen and Mercedes-Benz, also German rivals, are facing similar issues with declining sales in China due to economic weakness and stiff competition.
BMW announced in September that the brake issue affected over 1.5 million cars, resulting in delays for approximately 320,000 vehicles.
On Wednesday, the company confirmed that the delayed vehicles would be delivered to customers in the fourth quarter. #BMWQuarterlyProfit
BMW Quarterly Profit Outlook: Challenges and Recovery Plans
Looking ahead, BMW quarterly profit may continue to face challenges if the weak performance in China persists. However, the company remains optimistic about recovery, particularly in the U.S. market. BMW aims to address the brake issue and improve sales performance in the coming months.
