BMW Defends Combustion Engines in China as Profits Slump

German automotive group BMW has reported a drop in profits while insisting that the internal combustion engine remains viable in China. The carmaker's assessment signals that traditional powertrains continue to play an essential role in its commercial strategy, even as broader demand fluctuates in the world's largest automotive market.

China has long provided European premium carmakers with the bulk of their profit margins. When earnings there wobble, manufacturers feel immediate pressure across their entire business. BMW's insistence that petrol and diesel vehicles still have a future in the Chinese market highlights the awkward balancing act European legacy brands face: sustaining profitable conventional models to fund their transition to battery technology, all while navigating intense local competition.

No formal reaction from EU institutions was recorded in the report, but the debate over the combustion engine touches the nerve centre of European industrial policy. Brussels has set a target to end sales of new carbon-emitting passenger cars by 2035. For policymakers in the Berlaymont, seeing European giants lean on traditional engines abroad underscores the persistent tension between domestic environmental rules and the realities of global export markets.

BMW will have to demonstrate to investors how it plans to arrest its profit slide while managing divergent market demands in Europe and Asia. Automakers will also monitor whether Chinese demand for conventional engines holds up or gives way further to domestic electric rivals.