Germany, Sept 12 (Alliance News): BMW has revised its profit margin forecast for 2024, citing sluggish demand in China and complications related to a braking system supplied by Continental. The adjustment has pushed BMW’s shares close to a two-year low.
The luxury carmaker reported that delivery delays caused by the braking system issues will negatively impact sales in the latter half of the year. Over 1.5 million vehicles are affected, with approximately 1.2 million already delivered and checkable remotely for faults. However, the remaining 320,000 cars cannot be delivered at present.
BMW anticipates incurring “a high three-digit-million amount” in warranty costs for the third quarter due to these issues. The company now expects its profit margin on earnings before interest and tax to fall between 6% and 7%, down from a previous forecast of 8% to 10%.
Continental, the car parts supplier, indicated that only a “small proportion” of the braking systems would require partial replacement due to a potentially impaired electronic component.
BMW also highlighted continued weak consumer demand in China, despite government stimulus measures. This trend reflects broader challenges faced by automakers in the world’s second-largest economy, which remains the largest auto market globally.
