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BERLIN—Shares in BMW AG BMW -5.

88% fell by as much as 6% on Tuesday after the luxury car maker warned that emissions-related costs, product recalls and fierce price competition amid global trade disputes would dampen profit this year.

BMW said the main reason for the dimmer outlook was the cost of adjusting to new global rules for emissions testing to measure pollutants, greenhouse gas emissions, and fuel economy. The test, called world harmonized light vehicles test procedure, or WLTP, came into force in Europe in September and BMW racked up significant costs earlier in the year to adapt its vehicles to the new regime.

The profit warning comes amid a flurry of similar concerns from other companies in the sector, such as rival Daimler AG and supplier Continental AG , which have spoken out against disruptions to global markets and supply chains from political tensions and the U.S.-China trade dispute.

Several industry analysts saw BMW’s unexpected warning as a turning point in the industry, a sign that regulatory challenges and a volatile global trade environment would further hit sales and dent corporate profits. Analysts had expected weak auto industry performance in the three months to October to improve at the end of the year, but now fear it will continue.

“Today’s warning has extinguished the idea that the sector will rally again after a well-flagged soft third-quarter,” said Patrick Hummel, an automotive analyst at UBS.

Analysts cut their earnings outlook for BMW by about €1.2 billion ($1.4 billion), bringing consensus estimates down to about €9.7 billion.

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BMW Cuts Outlook, Blames Trade Disputes and Emissions Costs

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