FRANKFURT, Germany, Aug 1, 2024 (BSS/AFP) - German luxury carmaker BMW posted a drop in net profit for the second quarter on Thursday, dragged down by higher manufacturing costs and weakening demand in key market China.

Net profit at the BMW group -- which also includes the Rolls-Royce and Mini brands -- declined by 8.6 percent to 2.7 billion euros ($2.9 billion) between April and June, on the back of revenues down 0.7 percent to just under 37 billion euros.

Car deliveries dipped by 1.3 percent, to 618,743 units.

Deliveries in China were down 4.7 percent, where cooling domestic consumption and increased competition from local brands is hitting European carmakers hard.

"In China, in particular, revenues were impacted by heightened competition and weaker consumer sentiment," BMW said.

BMW said it expected "the economic situation to begin to stabilise" in China in the third quarter.

Higher manufacturing and personnel costs and spending on IT projects also hurt the group's earnings, BMW said.

There was better news in the battery-electric vehicle segment (BEV), where the group saw deliveries surge 22 percent in the second quarter -- at a time when many rival carmakers are struggling with slowing demand as European governments phase out electric subsidies.

"All-electric vehicles and models in the higher-priced upper segments" remain "in very high demand", CEO Oliver Zipse said in a statement, adding that e-mobility would be "our primary growth driver".

Looking ahead, BMW said it still expects to see a slight growth in overall car deliveries in 2024, thanks to "sustained demand" for premium vehicles and the introduction of new models.