Slowing demand in China led to steep falls in quarterly profit for Toyota, Honda and BMW, dragging even the strongest carmakers into a broader downturn hitting the sector. Until now, Japan’s Toyota and Honda had outperformed their European and US rivals due to strong hybrid and petrol sales in North America.

BMW on Wednesday reported a 61% drop in its quarterly third-quarter profit that missed analyst expectations because of slumping China sales and brake problems, but said it was on track to meet its adjusted full-year financial outlook.

BMW said Wednesday it faced "extraordinary challenges" as its quarterly profits plunged due to slumping Chinese sales and a vehicle recall, the latest sign of the crisis gripping Europe's auto sector.