BMW AG cautioned that "fierce" competition and higher spending levels will hold back profit gains this year, as aging models caused profitability to slide in the third quarter.
Slowing sales growth in China and pressure from rivals such as Mercedes-Benz are putting the world's biggest maker of luxury cars on the backfoot.
The company stuck to a goal of achieving a fifth consecutive year of record profit, but said growth will slow as costs to remain competitive climb.
"We are working hard to reach these targets, though we are faced with challenges in a number of markets," including slower growth rates in China, Chief Financial Officer Friedrich Eichiner said Tuesday on a call with reporters.
BMW is locked in a battle maintain the lead in global luxury-car sales over Daimler AG's Mercedes and Volkswagen AG's Audi.