BMW sold 551,075 vehicles in the third quarter, down 6.3 percent, and group profit before tax fell 10.6 percent to €2.08 billion. Sales across the group came to €30.5 billion, down 5.8 percent. The numbers are weaker than a year ago, and BMW has also cut its profit forecast for the year, but the company is clear that part of the story is a deliberate bet on the Neue Klasse.
Start with the cars. The BMW brand delivered 479,294 vehicles in the quarter, down 6.8 percent, and 1,483,963 year to date, down 6.4 percent. Europe and the US held up, with deliveries up 2.6 and 2.5 percent. China was the drag, with sales down about 25 percent, in line with a market that fell by a similar amount. All-electric cars made up 20 percent of BMW’s third-quarter sales, rising to 27.4 percent when plug-in hybrids are included. In Europe, almost half of BMW’s deliveries were electrified, and the all-electric share there was 34.7 percent.
Then the profit. The car business is where the pressure shows. Its margin, which is how much BMW keeps from each euro of car sales after paying its bills, was 3.4 percent against 5.2 percent a year ago, and operating profit fell 39.7 percent to €901 million. BMW attributes about 1.25 points of that to import tariffs and about 1.2 points to accounting charges from the BMW Brilliance Automotive deal in China. Cash was tighter too. The car business used €566 million in free cash flow in the quarter, against a €343 million inflow a year earlier, and year to date free cash flow is €724 million, down from €2.69 billion. One caution on the group figure: BMW says profit before tax was helped by valuation gains on interest-rate derivatives, so it flatters the picture slightly. Over nine months, group profit before tax is €6.13 billion, down 23.9 percent.
That context explains the guidance change. BMW now expects its car business margin for 2026 to land between minus 0.5 and plus 0.5 percent, down from 1 to 3 percent. The reason is a decision, not a surprise in the quarter. BMW is taking one-off charges in the fourth quarter as it retires older models and battery technology earlier than planned, and as it cuts management roles faster than announced. BMW calls those charges non-operating, and says its operating performance stayed solid in the third quarter. It expects the measures to cost about 2.5 points of margin this year. Without them, the margin would still be above 2.0 percent, and free cash flow guidance holds at more than €2.5 billion. Deliveries are now expected to fall moderately for the year, not slightly, while the all-electric share of deliveries is expected to rise slightly.
This is the second cut of the year. In June, BMW lowered the same range from 4 to 6 percent to 1 to 3 percent, pointing to China’s decline, tougher competition in Asia Pacific and the Middle East conflict, which kept energy prices high. That was a demand story. This one comes from the Neue Klasse doing better than BMW planned. Strong demand led it to add production shifts early, and the faster ramp-up lets it phase out earlier vehicle and technology generations, including selected Gen5 battery models.
For enthusiasts, the useful detail is what the money buys. Debrecen has moved to three shifts and will build the iX4 alongside the iX3. The new Gen6 battery plant at Irlbach-Straßkirchen opened in early October, and Woodruff in South Carolina begins series production before the end of 2026, with San Luis Potosí in Mexico following in 2027. Chairman Milan Nedeljkovic also confirmed a direct sales model for the BMW brand in Europe starting next year and a review of variants across the range, and said BMW is considering a model above the X7 for the US. R&D spending is down 6.8 percent to €1.79 billion for the quarter, while the Neue Klasse rolls out.
The takeaway is a quarter that looks soft on the numbers and deliberate in the plan. The target is a car business margin of 3 to 5 percent in 2028 and 8 to 10 percent at the beginning of the next decade. Retiring Gen5 models early is the part to watch, because it shrinks the choice on dealer lots while the Neue Klasse range is still filling out, and fewer variants will matter to North American buyers who like to specify their own car. If the Gen6 margin gains BMW is promising show up, this will look like the year it paid up front.