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BMW Cuts Profit Forecast Amid Industry Challenges
2024-09-11 23:55:08
Automotive
Business

BMW Cuts Profit Forecast Amid Industry Challenges

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BMW faces a significant reduction in profit forecast due to recalls, delivery bans, and supplier part issues. Problems with Continental's brake system impact over 1.5 million cars, leading to high warranty costs.

Weak sales in China contribute to negative sales effects ahead. The German automotive industry grapples with location challenges, transformation costs, and declining electric car demand in Europe.

BMW anticipates a double-digit percentage drop in profit before tax. The auto industry faces further challenges with stagnant global electric vehicle sales, European manufacturers losing market share, and rising competition from Chinese automakers.

Related news on that topic:

Massive Braking Problems at BMW: 1.5 Million Cars Recalled - ... Forecast Lowered

The Munich-based car manufacturer BMW is facing massive braking problems, leading to the recall of 1.5 million cars. The issues are related to a purchased brake system, resulting in additional costs and a lowered forecast for sales and profit margin. The reluctance to buy cars in China continues despite government support measures, causing BMW's stock price to fall by 5.7%. The recall and brake system problems have had a significant impact on BMW's financial performance, with the company expecting a slight decline in deliveries and a decrease in its pre-tax earnings. The challenges in the Chinese market have also affected BMW's global sales, leading to a correction in the annual sales forecast. The company is now expecting a lower profit margin of 6-7% instead of the previously projected 8-10%. This situation has raised concerns within the industry, with worries that other car manufacturers may also face similar problems. As a result, BMW's stock and the stocks of its suppliers have experienced a significant decline.

What Volkswagen's Woes Say About Germany's Economic Future

Germany's largest carmaker, Volkswagen, is facing job cuts and factory closures due to various challenges including soaring costs, a weaker domestic economy, and competition from China. These challenges reflect broader issues in Germany's economy, such as supply chain disruptions, an energy crisis, and a loss of competitiveness. Germany's industrial output has been declining for the past six years, and Volkswagen's shift towards electric vehicles is adding to its revenue woes. The country's 'debt brake' and infighting between coalition partners limit fiscal stimulus, but Germany has subsidized the domestic semiconductor sector. The industrial sector's share of Germany's GDP is expected to continue declining, and worsening geopolitical issues threaten globalization. However, major tech and automotive companies have announced investment plans in Germany, and there are potential growth opportunities in sectors such as biotech, green tech, AI, and defense. Germany's political landscape and the rise of populism have hindered necessary reforms, and the country is in need of structural changes. While the current challenges are significant, Germany remains an important destination for international investments.

Read 17 more recent news on this topic

The press radar on this topic:

Tagesspiegel
10. September 2024 um 13:46

Automotive Industry: BMW Significantly Reduces Profit Forecast

Economy
BMW significantly reduces its profit forecast due to recalls, delivery bans for 320,000 cars not yet delivered to customers, and problems with supplier parts. Problems with a brake system supplied by Continental affect over 1.5 million cars and cause warranty costs in the high triple-digit million range. Continental has made provisions in the mid-double-digit million euro range for this. In addition, weak sales figures in China are leading to negative sales effects in the second half of the ye..
focus
11. September 2024 um 12:45

1.5 million cars affected - BMW has to lower profit forecast due to recall shock

Economy
Finance
BMW is recalling 1.5 million cars due to problems with a purchased braking system; warranty costs in the millions; the profit forecast for 2024 has to be lowered.
zdf
11. September 2024 um 16:15

Automotive Industry: From Workhorse to Lame Duck

Economy
Technology
Environment
The persistent economic downturn and weak consumer demand in Germany are slowing down car sales. While markets in Europe and North America are shrinking, they are growing in China and India - but primarily for Asian manufacturers.
EL PAÍS
11. September 2024 um 16:41

80% of BMWs with faults are still in circulation: these are the models called for review

Economy
BMW has sold 1.2 million vehicles with brake system failure; it affects X models, Series 2/5/7, Rolls Royce Spectre, Mini Cooper, and Countryman; 80% of the cars are already in circulation.
CW

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