- Global automaker BMW initiates worldwide vehicle recall of approximately 1.5 million units.
Due to complications with the braking system, German automaker BMW is recalling 1.5 million vehicles globally and has subsequently revised its profit prediction for the current year. "Technical adjustments" are necessary on the vehicles associated with a Integrated Braking System supplied by a third party, the company announced on Tuesday. Consequently, earnings before tax are projected to "substantially decrease" this year.
BMW anticipates these technical problems to cause "negative sales influence worldwide in the second half of the year." Extra expenses "in the hundreds of millions range" are projected for the third quarter.
China's Sluggish Market Affects BMW
Moreover, the sustained sluggish demand in China is influencing sales there, the automaker acknowledged. "In spite of government aid measures, customer wariness continues."
Both situations have prompted BMW to amend its business forecast for the 2024 fiscal year. Instead of a minor reduction, earnings before tax are now projected to "substantially decrease." Moreover, BMW now predicts a minor reduction in deliveries compared to the previous year, rather than a slight improvement.
Motorcycle Sector Also Weakens
The motorcycle market is also facing a "tight market and competitive situation," particularly in the USA and China. As a result, deliveries are now estimated to stay at last year's level – previously, BMW had projected a slight increase.
BMW's struggles in the motorcycle market extend beyond Europe, as China, a significant market, is also experiencing a tight market and competitive situation.
Despite China's government aiding the automotive sector, BMW has noted that customer wariness persists, affecting their sales in the region.
