BMW Outpaces Mercedes in Sales but Lowers Forecast

Market Overview

BMW has managed to halt its declining sales, outperforming rival Mercedes-Benz. Despite posting significantly better sales figures than Mercedes, BMW has found it necessary to lower its financial forecast. In the third quarter, BMW achieved a notable increase in sales while Mercedes experienced a 12% drop in vehicle deliveries to dealers. However, BMW also issued a profit warning shortly after announcing its sales increase, indicating that its pre-tax profit is expected to decline slightly, instead of maintaining last year's levels.

Challenges in Key Markets

One of the primary reasons for BMW's adjusted forecast is the underperformance in the Chinese market during the third quarter. Consequently, BMW has revised its expectations for the fourth quarter in China, a crucial market for the company. BMW is also required to provide financial support to its dealers in China and anticipates that significant customs refunds from the American and German authorities will be delayed until 2026, impacting the company's free cash flow.

Sales Performance Analysis

Overall, BMW's sales have been stronger than Mercedes'. In the third quarter, Mercedes delivered 525,300 vehicles, while BMW's sales rose by nearly 9% to 588,300 units. This marks BMW's first sales increase after five consecutive declines. However, this improvement is partly due to a weak comparison period last year when BMW's sales dropped by 13% due to issues with brake components supplied by Continental. In the U.S., BMW saw a 24% rise in sales despite tariffs, contrasting with a 17% decline for Mercedes. Meanwhile, Mercedes is struggling with increased competition in China and declining consumer confidence due to the property market crisis. BMW's sales in China fell by 0.4% to 147,100 units.

Electric Vehicle Segment

BMW's electric vehicle sales also declined by 0.6% to 102,900 units. This drop could be attributed to customers awaiting the next generation of vehicles, set to launch next year. Mercedes, while having lower overall electric vehicle sales, managed to stabilize its numbers with 42,600 units sold, driven by the introduction of the new fully electric CLA model.

Brand Performance

BMW's core brand saw a 6% increase in sales, while Mini sales surged by over a third, and Rolls-Royce sales rose by 13%. Conversely, Mercedes recorded a 10% increase in sales of its high-end models, which helped offset declines in other segments. In summary, while BMW currently leads in sales over Mercedes, significant challenges remain, particularly in China and the electric vehicle market. The coming quarters will be crucial as both companies navigate these complex market dynamics.