There are profit warnings, and then there are existential howls. BMW added on Tuesday to the woeful din emanating from the European car industry, lopping about 60 per cent off the forecast operating profit for its car business for this year, mainly as a result of its struggles in China.
Europe’s automakers have progressively been squeezed out of the Chinese market: cheaper, domestically produced electric vehicles have been gaining share at the expense of the premium traditional cars in which companies like BMW, Mercedes-Benz, Volkswagen and Stellantis specialise.
As a result, sales have been crushed. Porsche’s revenue from China, for instance, fell by roughly two-thirds between 2022 and 2025, according to S&P Capital IQ. And the Chinese profit pool — which in peak years accounted for about half of the operating profit at BMW and Mercedes-Benz, according to Citigroup analysts — has shrunk to a puddle, or dried up completely. VW’s operating profit from its Chinese joint ventures almost halved last year, to €958mn.