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.

Penske Automotive Group Inc. reported a 14% drop in net income in Q3 due to the BMW recall and rising interest costs.

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 nearly 16%, and the company faces ongoing challenges in the competitive auto market.