BMW faces sales slump and technical issues in 2024

In 2024, BMW AG has revised its financial outlook due to a significant decline in global sales, influenced by various factors including technical issues with the Integrated Braking System (IBS) affecting over 1.5 million vehicles. These issues have led to delivery stops and are expected to incur additional warranty costs in the third quarter. Despite government stimulus measures, demand in China remains subdued, further complicating the company's sales performance. The company anticipates a slight decrease in deliveries compared to the previous year, with an EBIT margin projected between 6% and 7%, and a Return on Capital Employed (RoCE) between 11% and 13% for 2024. The automotive segment's Free-Cash-Flow is expected to exceed €4 billion ($4.41 billion) for the financial year, indicating some resilience despite the challenges. In September, BMW faced a recall of over 140,000 Mini Cooper SE electric vehicles due to battery overheating issues, which followed a notable achievement in August when the company surpassed Tesla in BEV registrations in Europe. However, these recent technical problems and the recall have dampened the momentum gained earlier in the year. The revised financial guidance reflects the cumulative impact of these events, with the full quarterly results and adjusted outlook set to be published on November 6, 2024. The company is now navigating a complex landscape of technical challenges and market demand fluctuations, which will likely shape its performance in the latter half of the year.