BMW’s Profit Plummets 61% Amid China Sales Slump and Major Recall

BMW Group reported a steep 61% drop in third-quarter profit on Wednesday, missing analyst expectations due to declining sales in China and issues with a braking system that led to a recall of 1.5 million vehicles. The German automaker’s shares fell to their lowest level in more than two and a half years, dragging down shares of fellow German carmakers Mercedes-Benz and Porsche which all saw declines of 3 to 5 percent. The sharp decline in profit highlights the challenges facing BMW, including a weakening demand in its largest global market, China, as well as significant recalls linked to faulty braking systems supplied by Continental. This profit slump marked BMW’s lowest quarterly profitability in over four years.

Despite these setbacks, BMW CEO Oliver Zipse struck an optimistic tone in comments to the press, emphasizing the company’s strong U.S. presence. With a major production facility in Spartanburg, South Carolina, and 30 additional locations across 12 states, BMW is well-positioned to weather potential challenges from any new U.S. tariffs, should they arise. “We shouldn’t be too nervous about what might happen,” Zipse noted, suggesting that any tariff hikes could lead BMW to increase local production for the U.S. market.

In the nine months to September, BMW’s total global deliveries fell by 4.5% to 1.75 million vehicles, including a 13% year-over-year decline in the third quarter alone. China, the company’s largest market, saw the sharpest declines, while the U.S. and European markets also contributed to the drop in overall sales.

The i4 – BMW’s Best Selling EV

However, BMW’s electric vehicle segment offered a positive contrast, with fully electric vehicle sales surging by 19.1% year-over-year, totaling 294,054 units in the first nine months of 2024. The MINI brand saw especially strong growth, with EV sales jumping by 54.3% in the third quarter. In Europe, BMW managed a 7.6% increase in nine-month sales, thanks to strong demand in markets like Spain, the UK, France, and Italy.

In response to the braking system issue, BMW has ramped up the replacement of faulty components, with most stock vehicles expected to be delivered to customers by the end of the year. Although the recall impacted BMW’s financial performance in the Americas, the company maintained a stable market share in the region.

Looking forward, BMW remains committed to achieving its annual targets despite the recent financial and operational challenges. Zipse emphasized the company’s investment in new products and technologies, including its upcoming NEUE KLASSE models, which are set to play a pivotal role in BMW’s future growth.

[Source: BMW]

First published by https://www.bmwblog.com

Source: BMW BLOG