BMW Recalls 1.5 Million Cars Over Brake Issue

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BMW has issued a recall for 1.5 million vehicles worldwide due to a brake system defect that may affect the functionality of the brake booster. This recall also impacts 320,000 undelivered cars, leading to a ban on deliveries. The automaker has lowered its 2024 financial forecast due to weakened demand in China and the significant recall. Both the recall and muted market expectations are affecting BMW’s stock, leading to a dip in share prices.

Key Highlights:

• 1.5 million vehicles recalled over brake system concerns.
• Affects both sold and 320,000 undelivered cars.
• Delivery ban on new vehicles due to safety concerns.
• BMW adjusts its 2024 profit and sales forecast.
• Weaker demand in China and the recall weigh on BMW’s performance.
• BMW’s shares, along with those of supplier Continental, have fallen following the announcement.

BMW’s brake system issue revolves around potential problems with the Intergrated Braking System (IBS), which may lead to reduced braking power, affecting driver safety. The recall involves BMW models manufactured between 2021 and 2023, and the company urges affected customers to schedule repairs with authorized dealers.

In addition to the recall, BMW’s lowered forecast signals a tough market ahead, particularly in China, where demand has been softer than expected. As part of its updated guidance, BMW warned of tighter margins in its automotive division, which could impact overall profitability in 2024.

Despite the challenges, BMW remains committed to addressing the brake issue swiftly and ensuring the safety of its customers. The company’s focus on quality control and market adaptation will be key to navigating the year ahead.