By Jonathan Davies

BMW has reported a slight fall in profits for the second quarter after a drop in sales in China.

The German car manufacturer posted profits of €1.75 billion ($1.92bn; £1.23bn) in the second three months of the year, compared with €1.77bn in the same period last year.

After a decade of growth, BMW saw sales fall in China, the world's biggest car market, in May and June.

"If conditions on the Chinese market become more challenging, we cannot rule out a possible effect on the BMW Group's outlook," the carmaker said.

BMW also warned that it suffered from changing consumer preferences when it comes to buying cars. It said that people are edging towards lower-margin, compact cars, rather than the larger models produced by BMW.