German automaker BMW reported on Thursday a sharp drop in first-quarter profits due to an accounting effect, while sales also slipped in Europe and China.

Net profits fell 64 per cent to 3.7 billion euros ($4.1 billion) compared to the period last year, when the figure had been boosted by the full integration of its Chinese business BMW Brilliance.

The Munich-based group’s operating profit nevertheless jumped 58.5 per cent to 5.4 billion euros, lifted by continued high prices for the luxury carmaker’s vehicles.

But overall vehicle sales declined by 1.5 per cent year-on-year, with a 6.6 per cent slide in China and a 1.9 per cent decrease in Europe.

In Europe, ‘the environment was characterised by persistent inflation and high interest rates,’ BMW said.

In Asia meanwhile, the ‘after-effects of the coronavirus pandemic in China dampened the BMW Group’s business development’.

The picture was more positive in the United States, where deliveries of vehicles were up 11.4 percent.

The group also saw sales of fully electric vehicles more than double, and they now represent 11 percent of all the group’s deliveries.