Financial Implications of the Recall
announces a significant reduction in its 2024 fiscal year's sales and earnings targets, attributing part of the downturn to the financial fallout from a major recall affecting over 1.5 million vehicles globally due to a braking system fault.
The recall, involving a faulty integrated braking system supplied by , is expected to cost BMW a "high three-digit million (euro) amount" in the third quarter, with halted deliveries further impacting sales.
Market and Operational Adjustments
In response to the recall and ongoing weak demand in China, BMW has revised its automotive segment's earnings before interest and taxes margin down to 6%-7%, and expects a slight decrease in worldwide deliveries for 2024.
Continental AG, the supplier of the faulty braking system, has confirmed the issue and stated that while a small proportion of the affected systems will need replacement, it has set aside funds to cover the expected warranty costs.