BMW Group cut its 2024 financial outlook on Sept. 10 after faulty integrated braking systems triggered delivery stops and a costly global recall for over 1.5 million vehicles, according to a press release.
The delivery stops will have a “negative worldwide sales effect,” while the warranty costs for the recall are anticipated to be in the high three-digit million amount in Q3.
BMW of North America has issued 23 recalls so far in 2024, according to the National Highway Traffic Safety Administration, but the IBS recall has not been filed with the agency yet.
Additionally, the automaker said softening demand due to weak consumer sentiment is impacting sales in China.
As a result of the headwinds, BMW lowered its delivery guidance from a slight increase over the previous year to a slight decrease, the release states. It also expects a smaller profit margin: 6% to 7%, rather than 8% to 10% previously forecast.
BMW believes the automotive constraints will largely be contained to Q3, but highlighted additional challenges for its motorcycle segment.
“The ongoing competitive situation across core markets — including China and the USA — is having a major impact on volume and price realization,” the release said.
BMW expects the motorcycle segment’s deliveries to be flat in 2024 and profit margins to be in line with automotive.
