FRANKFURT - SABA :
German carmaker BMW was forced on Tuesday to cut its annual targets due to a faulty braking system in its vehicles, prompting the group to conduct recalls or suspend deliveries of 1.5 million vehicles.
The issues are related to the intelligent braking system "LBS" linked to a supplier that BMW did not disclose His name or technical details.
As a result of these withdrawals, in 2024 BMW deliveries are expected to see a "slight decline" year-on-year, whereas in the initial forecast they were expected to increase slightly, following the record level of 2.56 million units in 2023.
This will also affect the group's profitability, as the operating margin in BMW's automotive business, a key division of the company, is now expected to range between "six percent to seven percent," compared to eight percent to ten percent previously, according to a company statement.
Taxable income for the group, which also makes motorcycles, is expected to be "significantly lower," down from previous forecasts of a "slight" decline.
On the Frankfurt Stock Exchange, shares BMW and Continental lost more than seven percent after the announcement.
German carmaker BMW was forced on Tuesday to cut its annual targets due to a faulty braking system in its vehicles, prompting the group to conduct recalls or suspend deliveries of 1.5 million vehicles.
The issues are related to the intelligent braking system "LBS" linked to a supplier that BMW did not disclose His name or technical details.
As a result of these withdrawals, in 2024 BMW deliveries are expected to see a "slight decline" year-on-year, whereas in the initial forecast they were expected to increase slightly, following the record level of 2.56 million units in 2023.
This will also affect the group's profitability, as the operating margin in BMW's automotive business, a key division of the company, is now expected to range between "six percent to seven percent," compared to eight percent to ten percent previously, according to a company statement.
Taxable income for the group, which also makes motorcycles, is expected to be "significantly lower," down from previous forecasts of a "slight" decline.
On the Frankfurt Stock Exchange, shares BMW and Continental lost more than seven percent after the announcement.