Technical actions related to its integrated braking systems will result in additional warranty costs in a high three-digit million amount in the third quarter, it says
BMW trimmed its profitability guidance for 2024 on Tuesday (Sep 10), pointing to technical problems that led to delivery stops for cars as well as persistently sluggish demand in the key market of China.
The German carmaker said it expects its margin of earnings before interest and taxes (Ebit) to be between 6 and 7 per cent for 2024, having previously guided for a figure between 8 and 10 per cent.
The company’s shares slipped 8 per cent at 1128 GMT following the announcement, dragging Mercedes-Benz, Volkswagen, Stellantis, Porsche and Renault down between 4 and 5 per cent.
BMW said the downward revision was triggered partly by headwinds in its core automotive segment resulting from delivery stops and technical actions linked to the integrated braking system, which is provided by Continental.
Continental said that only a “small proportion” of the braking systems it produces and supplies to BMW will be partially replaced because of an electronic component that may be impaired. Its shares were down 6 per cent.
The German company also flagged ongoing muted demand in China affecting sales in the country, joining the group of automakers facing difficulties in the world’s second-biggest economy.
BMW also forecasts a slight decrease in deliveries, without providing a specific figure. The car manufacturer had previously expected an increase.
The technical actions related to the integrated braking systems affect more than 1.5 million vehicles and will result in additional warranty costs in a high three-digit million amount in the third quarter, the company added. REUTERS
