BMW Recalls 1.5 Million Vehicles Due to Brake System Fault
BMW is recalling 1.5 million vehicles due to a faulty braking system from supplier Continental, leading to a significant reduction in its earnings forecast for 2024. The company expects to incur nearly €1 billion in costs related to the recall.
| Score | Value |
|---|---|
Scale | 8 |
Novelty | 5 |
Positivity | 2 |
Reliability | 9 |
Actionability | 8 |
Society | 7 |
Journalism | 5 |
Highlights
- BMW is recalling 1.5 million vehicles due to a faulty braking system supplied by Continental.
- The recall is expected to cost BMW nearly €1 billion and significantly lower its earnings forecast for 2024.
- BMW's expected operating margin for 2024 has been reduced to 6% to 7%, down from a previous range of 8% to 10%.
- Approximately 1.2 million of the affected vehicles have already been delivered to customers, while 320,000 remain undelivered.
- The braking system issue affects various BMW models produced between June 2022 and August 2024.
Perspectives
- Analysts express concern that the financial impact of the recall and weak demand in China could lead to significant losses for BMW, with potential EBIT revisions of up to €2.76 billion. [6][8]
- Continental AG claims that only a small proportion of the braking systems it supplied to BMW will need replacement, suggesting that the overall impact may be less severe than BMW's estimates. [5][9]