Profits at Volkswagen, BMW and Mercedes-Benz fell sharply in the third quarter, and the three carmakers issued four profit warnings, Handelsblatt reports. The paper blames the shift to electric vehicles in Europe and a collapse in combustion-engine business in China, and says no improvement is in sight.

The guidance points the same way. Volkswagen cut its 2026 operating return on sales forecast on Sept 18 to up to 1%, from a range of 4.0% to 5.5%, citing about EUR 10 billion in special effects. BMW said on Tuesday it now expects an automotive EBIT margin of -0.5% to +0.5%, against 1% to 3% in its June guidance. Mercedes-Benz cut its 2026 Cars adjusted return on sales outlook on Oct 27 to 2% to 3% from 3% to 5%, and said group EBIT would be at the prior-year level.

Volkswagen finance chief Arno Antlitz said on Sept 18 that China's passenger car market had contracted by around 20%, with no stabilization in sight, Bloomberg reported. Mercedes-Benz's China deliveries fell 28% in the first half to 210,245 vehicles, according to its report, and it named a more challenging China market as a reason for its cut. Volkswagen's third-quarter deliveries fell 14.3% from a year earlier.

Not everything fits the picture of a collapsing quarter. Mercedes-Benz's preliminary third-quarter group EBIT was EUR 1.77 billion, against a consensus of EUR 1.6 billion.

BMW's guidance also carries a cost of its own making. It said its structural and efficiency measures would bring a one-time negative earnings impact in the second half of 2026, with the benefits coming in later years.

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