BMW Announces Far-Ranging Recall and Delivery Ban
BMW has issued a widespread recall of over 1.5 million vehicles due to brake system issues, resulting in high warranty costs. In addition, deliveries of 320,000 cars have been suspended before reaching customers, affecting global sales negatively.
Key Points:
- Brake system problems affecting BMW cars.
- Delivery ban on 320,000 cars due to the issue.
- Supplier Continental cited an electronic component error.
- BMW cuts profit and sales expectations.
- Negative impact on sales due to subdued demand in China.
Despite ensuring that braking performance meets legal standards, BMW expects a decrease in vehicle deliveries this year. The recall triggered a decrease in profitability guidance to 6-7% from 8-10%. Shares of BMW and Continental dipped following the announcement. This incident follows a previous recall of 1.4 million vehicles in China. With the company facing challenges in profitability and sales, the automotive giant is working to resolve the issue and regain consumer confidence.