BMW's third-quarter net profit fell 14.7% to 1.448 billion euros ($1.61 billion), the German carmaker said on Wednesday, Nov. 4, as deliveries in China dropped by almost a quarter and it confirmed a forecast that its core car business could break even or post a loss for 2026.

Revenue fell 5.8% to 30.45 billion euros in the July-to-September quarter. Group earnings before interest and taxes slid 29.7% to 1.589 billion euros. The results came a day after BMW cut its full-year automotive margin target to a range of minus 0.5% to plus 0.5%, from 1% to 3% previously, its second profit warning this year, according to Hurriyet Daily News.

For investors in Asia, the numbers show how quickly China has turned from the profit engine of the German premium brands into their weakest region. BMW, Mercedes-Benz and Volkswagen all reported sharp falls in Chinese sales in the third quarter, while Chinese manufacturers with cheaper, more technology-heavy cars have taken share at home and are exporting more to Europe.

BMW's China deliveries fall 24.8%

BMW delivered 114,355 vehicles in China in the third quarter, down 24.8% from a year earlier, according to Just Auto's report on the company's October delivery figures. In its results statement, BMW said the decline was in line with the fall in the overall Chinese market. China sales in 2025 had already sunk to their lowest level since 2017, Hurriyet reported.

Worldwide deliveries fell 6.3% to 551,075 vehicles. Europe and the United States moved the other way: deliveries rose 2.6% in Europe and 2.5% in the U.S., BMW said. Fully electric cars made up 20% of group deliveries, and 34.7% in Europe.

BMW has pledged to shift more of the supply chain for cars sold in China into the country to win back market share, according to Hurriyet. Its next attempt is the long-wheelbase iX3, a China version of its new electric SUV that launches there in November, with more models from its Neue Klasse platform due in 2027, the company said.

Brand by brand, the slowdown was broad. BMW-brand deliveries fell 6.8% to 479,294, Mini slipped 2.4% to 70,712 and Rolls-Royce dropped 18% to 1,069 cars. Motorcycle deliveries fell 12.5%.

Automotive margin sinks to 3.4%

The automotive segment, which makes and sells the cars, earned EBIT of 901 million euros, down 39.7%, on revenue of 26.67 billion euros. Its margin fell 1.8 percentage points to 3.4%. That figure was helped by a favorable legal settlement over an integrated braking system, BMW said.

U.S. import tariffs took about 1.25 percentage points off the car margin in the quarter, compared with about 1.75 points a year earlier. Automotive free cash flow was negative at 566 million euros, against a positive 343 million euros in the third quarter of 2025. BMW kept its full-year target for automotive free cash flow above 2.5 billion euros.

Financial services, which finances and leases BMW cars, held up better. Its EBIT dipped 0.5% to 621 million euros while revenue rose 5.8%. Group profit before tax fell 10.6% to 2.083 billion euros, giving a pretax margin of 6.8%.

Restructuring costs drive the warning

Most of the guidance cut comes from BMW's own clean-up. The company said about 2.5 percentage points of full-year automotive margin will go on portfolio and structural measures, including an earlier phase-out of some models built on its older fifth-generation battery technology. Before those costs, it expects an operating automotive margin above 2%. Production ramp-up costs and higher-than-expected severance payments contributed to the warning, Hurriyet reported.

Chief Executive Milan Nedeljkovic said the industry's situation calls "for decisiveness and swift implementation," and that BMW will speed up its structural measures. Cuts to management functions will come faster than first announced, the company said. Chief Financial Officer Walter Mertl called speed "a key success factor" in the realignment.

The warning puts BMW in step with its domestic peers. Mercedes-Benz cut its 2026 profit outlook in late October after its China car sales fell 31% in the third quarter, and Volkswagen posted a third-quarter loss, with its Chinese joint ventures in the red over the first nine months.

For the first nine months, BMW's profit before tax fell 23.9% to 6.128 billion euros and net profit declined 24.4% to 4.32 billion euros. The company now expects full-year car deliveries to come in moderately below 2025, and the first test of its China reset is the iX3 long-wheelbase launch this month.