BMW had to cut down it 2024 profit margins due to slow demand in China and the ongoing braking issues, throwing its shares to close to two-year lowest.
BMW said delivery hold-ups because of the braking system issues will have a negative impact on sales in the last quarters of the year.
BMW said delivery hold-ups linked to the braking system would have a negative sales effect in the second half of the year, adding more than 1.5 million cars were affected. Around 1.2 million of those vehicles have been already delivered to clients and can be remotely checked for faults via over-the-air software, but the remaining 320,000 vehicles cannot be handed over for now, BMW said.
BMW 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, which is also the world’s largest auto market. “With China only getting tougher, and BMW overexposed to China, and with H2 recovery expectations looking a bit optimistic, it remains tough to see the positive catalyst for BMW,” Citi analysts wrote.
“Despite stimulus measures from the government, consumer sentiment remains weak,” BMW said.
The company said it expects its margin on earnings before interest and tax to be between 6% and 7% for 2024, having previously forecast a figure between 8% and 10%, making them the top decliners on Germany’s benchmark DAX index and also dragging down European auto stocks.
