BMW AG’s profit margin fell to the lowest in more than four years in the third quarter as a costly recall and weak demand in China weighed on earnings.

BMW reported a sharp drop in profitability for its key automotive unit, hit by costs of a recall and weak demand in China, even as it forecast stronger earnings in the fourth quarter.

BMW reported an 84% drop in quarterly profits, primarily due to declining sales in China and a costly vehicle recall affecting 1.5 million cars. Overall sales decreased by nearly 16%, and the company faces ongoing challenges in the competitive auto market.