Renault set a gloomy tone for the European car industry by slashing its outlook for revenue and profit, saying weakening economies are weighing on car sales and tougher rules on emissions have increased costs.

Renault’s Dacia has built a devoted following for its often spartan, low-cost vehicles, making it one of the French manufacturer’s fastest-growing consumer brands.

BMW’s automotive car division swung to a loss for the first time in a decade as car prices slumped and a legal provision over alleged collusion ballooned to €1.4bn.

Mercedes-Benz sold more luxury cars than Audi and BMW in July, as its rising deliveries in China defied a market slowdown there.

The French state will spend as much as €1.23bn to raise its stake in Renault and maintain its influence in the carmaker.