BMW, Merc sales hit slow lane in Beijing

BMW AG and Mercedes-Benz Group AG saw car sales slump in China in the third quarter as weak consumer sentiment in their biggest market weighed on luxury spending.

The developments, along with slowing growth for electric vehicles in Europe, have contributed to profit warnings from both BMW and Mercedes. The manufacturers may also lose out from escalating trade tensions: Beijing said it’s considering raising duties on imported large-engine vehicles after the European Union voted to slap tariffs of up to 45% on Chinese-made EVs.

The 30% fall for BMW and Mini brands in China compares to declines of less than 5% in both the first and second quarters from a year earlier. The slump in the world’s biggest auto market dragged overall BMW group vehicle sales down 13%. The company said a braking systems recall also affected deliveries.

For Mercedes, the overall 12% sales drop for its top-end cars in the period marks a setback for the brand’s push further upmarket. It’s yet another warning sign for Germany’s marquee industry, which is struggling with high costs at home and intensifying headwinds in China, where local manufacturers led by BYD Co. are dominating on EVs.