BMW has slashed its 2024 sales and earnings forecasts, citing significant expenses tied to a global recall affecting over 1.5 million vehicles.
The carmaker announced Tuesday that addressing the faulty braking system, made by a supplier, will cost a “high three-digit million euro amount” in the third quarter alone.
The recall has halted deliveries of affected vehicles, further impacting sales.
The braking issue, first identified in an internal quality check earlier this year, prompted BMW to issue a recall in February.
However, the scope of the problem has since expanded. The company now estimates 1.53 million vehicles are impacted across five countries, including 370,000 in China and 270,000 in the US.
Models affected include several BMW X models, the 5 and 7 Series, Rolls-Royce Spectre, and Mini Cooper.
In addition to the recall costs, BMW is grappling with weakened demand in China, prompting the company to lower its 2024 earnings margin forecast from 8-10% to 6-7%.
The carmaker also expects global deliveries to decline slightly, reversing earlier growth predictions.
