Poor Demand In China Hits BMW Profit In Q2

BMW revealed on Thursday that its core automotive segment profit margin for the second quarter was lower than anticipated. The luxury automaker's sales were negatively impacted by increased competition and decreased demand in China.

In its car segment, the German automaker's earnings before interest and tax (EBIT) margin dropped to 8.4% from 9.2% in the same period last year. This was below the 8.7% analysts had predicted, based on a company-compiled consensus, Reuters reported.

BMW also mentioned a record level of investment, with the automaker's spending on electric vehicles and model updates anticipated to reach a peak this year. The automaker reaffirmed its projections for 2024, indicating a minor decline in the group's pre-tax profits because of increased expenses for personnel, manufacturing, and R&D.

The company's full-year target range of 8–10% was not met by the BMW auto segment's margin in the second quarter.

In their primary market of China, local automakers are gaining market share with less expensive electric vehicles, putting pressure on BMW and its competitors to reduce prices.



The Munich-based carmaker saw a 4% slump in its China sales in the first six months of the year but performed better in the region than Volkswagen and Mercedes, Reuters reported.