Toyota and BMW are the latest casualties in China's evolving EV market
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- Toyota and BMW both reported plunging profits on Wednesday.
- The Japanese and German automakers have faced falling sales in China.
- China's EV giants like BYD are squeezing out foreign automakers and increasingly expanding into the premium market.
China's EV giants are rising, putting foreign automakers under pressure in the world's largest car market.
Toyota and BMW reported a drop in quarterly profits on Wednesday, with sales in China slumping for both companies as they face growing competition from local automakers like BYD.
Toyota's profit for the quarter ending in September was 573.7 billion yen ($3.7 billion), down from nearly 1.28 trillion yen ($8.3 billion) over the same period last year.
The company is grappling with a slowdown in sales in China and its home market, Japan.
According to Toyota data released in October, sales in Japan plunged by nearly 17% in the first nine months of the year.
In China, meanwhile, Toyota is facing fierce competition from local EV giants like BYD. Thanks to their affordable electric vehicle range, BYD has rapidly taken market share from foreign firms.
Sales in China were down just over 10% in the first nine months of the year, with Toyota attributing the drop to "severe market conditions" such as "intensifying price competition."
Luxury European carmaker BMW, meanwhile, has also found itself facing weakness in China and a high-profile recall.
The German auto group said profit before tax dropped nearly 80% in the third quarter from the previous year as it reported earnings on Wednesday.
BMW previously cut its financial outlook after recalling more than 1.5 million vehicles due to a braking system issue. The automaker said deliveries fell 30% in China in the third quarter.
Like its German rivals Mercedes and Audi, BMW has been hit by stuttering demand for luxury vehicles in China — and it is also facing pressure from local rivals.
BYD and smartphone maker Xiaomi have made efforts to expand into the premium market. BYD launched the $150,000 Yangwang U8 SUV last year, and Xiaomi recently unveiled a high-performance version of its SU7 luxury sedan.
Toyota and BMW did not respond to a request for comment, sent outside normal working hours.