BMW failed to fire on all cylinders in Q3,
As the German carmaker reported a 27 percent drop in profit to $2 billion - missing analyst expectations.
Research and development expenses hit margins,
As the firm invests heavily in electric cars,
Buying up raw materials for batteries,
And building a value chain for battery cells in Europe,
all challenges being faced across the auto sector.
(SOUNDBITE) (ENGLISH) COMMERZBANK, GLOBAL FINANCIAL ECONOMIST, PETER DIXON, SAYING:
"I guess the changeover is going to be a long, drawn out process. We're talking probably a couple of decades before the auto sector has to be fully green, fully electic. But nontheleess during that transition phase as we don't really know what we're transitioning to the auto sector will continue to be beset by worries of how to balance the sales mix between conventional combustible engined vehicles and the new electric vehicles."
Currency headwinds, higher raw material prices and tariffs from the U.S.-China trade war also hurt margins.
And while luxury car deliveries saw a slight rise,
BMW's return on sales for the automotive division fell to 4.4 percent,
Well below its target of 8 to 10 percent.
BMW warned in October its pretax profit would fall this year,
And cut its profit guidance for cars,
Blaming intense price competition.
Shares were down 2.6 percent in early trading.
But there was one consolation - BMW had fewer problems than rivals Volkswagen and Daimler when it came to selling cars that conform to new vehicle emissions regulations.