BMW AG's
"The scale of the increase during the forecast period is likely to be held down by fierce competition on automobile markets, rising personnel costs, continued high levels of upfront expenditure to safeguard business viability going forward and upcoming challenges relating to the normalisation of the Chinese market," BMW said in a statement on Tuesday.
Sales in China have been slowing. In May, BMW's and Mini'a China sales fell for the first time in a decade, dropping 4.2%, and 0.1% in June.
BMW's earnings before interest and tax fell 3% to 2.52 billion euros, exactly in line with the average forecast in a Reuters poll.
BMW's return on sales in its automotive division fell to 8.4%, down from 11.7% in the year-earlier period and below the 10.7% margin reported by rival Mercedes-Benz Cars and the 9.9% earned by Audi.
"Weaker performance at Automobiles as well as still cautious statements on China might bode ill for BMW shares today," wrote DZ Bank analyst Michael Punzet, who rates BMW "buy".
Shares in BMW were indicated 1.3% lower ahead of the 0700 GMT Frankfurt market open.