Organic sales in the division fell 5% in the third quarter, against an expected 1.8% decline in the Visible Alpha consensus, and group revenue of €18.5 billion grew 1% organically.
Reuters puts the loss at about $350 billion for the top 10 firms in the STOXX Europe Luxury 10 index this year, while LVMH shares are down more than 40%.
The deal, announced by Maros Sefcovic on Friday, 9 October, caps imports at 350,000 vehicles a year from early December, and EU leaders take it up at the Brussels summit on Thursday, 15 October.
BMW's third-quarter deliveries fell 6.3% and its China sales dropped by a quarter, while Chinese brands held almost 11% of the European car market in the second quarter according to Schmidt Automotive Research.
European luxury stocks have lost heavily this year. Reuters puts the decline at about $350 billion in market value for the top 10 firms in the STOXX Europe Luxury 10 index, while a separate Reuters report cites about €330 billion for the continent's leading groups. LVMH has fallen more than 40% since January, and the big four (LVMH, Hermès, Kering and Richemont) have seen their combined market capitalization nearly halve since around 2024. Richemont, which concentrates on watches and jewellery, is the exception.
LVMH published its third-quarter figures on Monday, 12 October. Sales in its fashion and leather goods division, which produces nearly half of group revenue, fell 5% on an organic basis, while the Visible Alpha consensus had pointed to a 1.8% decline. Group revenue reached €18.5 billion, up 1% organically, short of the 1.3% growth analysts expected. Growth in the watches and jewellery arm, which includes Bulgari and Tiffany, dropped to 6% from 9% earlier in the year. Four sell-side analysts cut their LVMH target prices by an average of 9%, and the shares were down 1.5% by 0730 GMT on Tuesday.
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Asked about the recovery prospects for Louis Vuitton, the group's chief financial officer, Cecile Cabanis, told analysts:
“It takes a bit of time, but I don't think there are a lot of shortcuts here.”
China, which for nearly two decades drove luxury growth, has seen sales stagnate since the post-pandemic boom. Público attributes much of the weakness to the property crisis and notes that a tax offensive against wealthy individuals is the latest problem for brands. Corriere della Sera points to a slowing economy, a weak property market, financial uncertainty and closer Chinese tax scrutiny of assets held abroad. The same paper says Louis Vuitton is losing ground while Uniqlo and Zara win shoppers who weigh quality, style and price more carefully. Federico Bonelli, senior partner at Impacta Strategy and formerly CEO of Pinko, told Corriere:
“Money has not disappeared: it has become more selective.”
JPMorgan analysts wrote to clients that the Chinese market seems to have stepped down by more than feared, and they expect further pressure across the sector. In Paris, Hermès, Kering and Richemont shares fell between 1% and 2.2%, while LVMH traded at its lowest level in six years, according to Público.
On Friday, 9 October, Maros Sefcovic, the EU's trade chief, said from Beijing that a hybrid-car arrangement had been agreed with China. The ceiling is 350,000 imported hybrids annually, applying from early December, and it rises by 6% a year after that. Reporting indicates the arrangement might shrink Chinese hybrid shipments to Europe by over half. Heads of EU governments take up the agreement at the Brussels summit on Thursday, 15 October, as part of an effort to rebalance a trade gap that now exceeds €1 billion ($1.12 billion) a day.
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Chinese customs data put hybrid shipments to the bloc at $7.5 billion in the first half of 2026, compared with $2.5 billion a year earlier, a threefold increase. The first-half figure was nearly nine times the $845 million exported in 2021. Separately, the euro has dropped to 3.5-year lows against China's offshore yuan, driven by French debt tensions. A Reuters commentary by Mike Dolan argues the currency move cushions the rivalry from a looming surge of Chinese shipments.
BMW reported on Tuesday that its third-quarter global deliveries fell 6.3% year on year, with sales in China down by a quarter. Its figures include Mini, and BMW joins other German carmakers reporting weaker quarterly volumes as Chinese rivals gain ground. In the second quarter, Chinese makers such as BYD and Geely accounted for almost 11% of the European car market, according to Schmidt Automotive Research.
European makers are responding with nostalgia. Renault's electric Renault 5, first launched in 1972, has become Europe's top-selling mid-sized EV so far in 2026, and the group lifted first-half revenue by 9%. Stellantis unveiled an electric Citroen 2CV at the Paris Autoshow in the week of 12 October, and Volkswagen's electric ID. Polo borrows heavily from the Golf of the 1980s, with an optional retro dashboard mode that plays music from a virtual cassette.
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LVMH's fashion and leather goods sales fell 5% in the third quarter, well below expectations, as Chinese demand weakened. Europe's top luxury stocks have shed about $350 billion this year, while Beijing's hybrid car trade deal with the EU and BMW's China slump add to the pressure on European industry.
AI text based on reports by Le Temps, PÚBLICO, Corriere della Sera and other publishers. Changed .