BMW and Mercedes quarterly gross sales drop on weak China By Reuters

By Andrey Sychev and Miranda Murray

BERLIN (Reuters) -Sluggish demand and stiff competitors in China hit third quarter gross sales at BMW (ETR:) and Mercedes, the German luxurious automakers mentioned on Thursday.

The German automotive sector is dealing with a number of challenges, starting from excessive manufacturing prices and managing the shift to electrical automobiles to falling demand and rising competitors from China.

The troubles have been illustrated most not too long ago by a cost-cutting drive at Europe’s largest automaker, Volkswagen (ETR:), which is contemplating plant closures in Germany for the primary time.

For the July-September quarter, BMW’s gross sales fell 13%, whereas Mercedes reported a 3% drop.

Demand in China, the world’s largest auto market, is affected by a flagging financial system, whereas international carmakers face stiff competitors from native producers providing cheaper fashions, particularly EVs.

BMW’s gross sales in China slumped by a 3rd whereas Mercedes’ fell by 13%.

Mercedes additionally famous a subdued world battery electrical car (BEV) market, reporting a 31% BEV gross sales drop. For BMW, BEV gross sales rose 10% within the quarter.

The European Union has not too long ago imposed hefty tariffs on Chinese language-made EVs, saying they profit from unfair state subsidies. Beijing denies this and has threatened retaliation, whereas German automakers, which make a couple of third of their earnings in China, have voiced concern and known as for extra talks.

European shoppers are reluctant to purchase costlier EVs, partially due to patchy charging infrastructure.

Shares in BMW and Mercedes had been flat after the gross sales information.

The businesses minimize their annual forecasts in September citing a sluggish Chinese language market, whereas BMW additionally talked about issues with a braking system provided by Continental.

To this point this 12 months, BMW and Mercedes shares are down 23% and 9% respectively, whereas the pan-European automotive index is down 13%.