BMW Recalls 1.5 Mn Cars Over Bad Brake, Cuts Outlook

Frankfurt, (APP - UrduPoint / Pakistan Point News - 10th Sep, 2024) BMW said Tuesday it was recalling about 1.5 million vehicles due to problems with their brakes and cut its outlook for the year, sending the German luxury carmaker's shares tumbling.

The recall will have a "negative worldwide sales effect in the second half of the year," said the group, which also includes the Rolls-Royce and Mini brands.

The financial impact in the three months to the end of September will be in the "high three-digit million" euro range, it said.

It was further bad news for BMW, which has been hit by weakening demand in China, and for the broader German auto sector after Volkswagen said last week it was mulling the unprecedented step of closing factories in Germany.

The braking system behind the problems was supplied by Continental, a source close to the matter told AFP.

As well as the impact of the recall, "the ongoing muted demand in China is affecting sales volumes. Despite stimulus measures from the government, consumer sentiment remains weak," BMW said in a statement.

Munich-headquartered BMW now expects a slight decrease in vehicle deliveries this year compared to last, having previously forecast a slight increase.

It did not give a precise figure. In 2023 deliveries of BMW, Rolls-Royce and Mini vehicles stood at 2.56 million.

The automaker also trimmed its guidance for profitability, and expects margins this year between six and seven percent, down from eight to 10 previously.