BMW recently reported a challenging third quarter, with a 61% drop in profits, primarily driven by declining sales in China and a widespread brake problem in some of its models. This issue, linked to a Continental-supplied braking system, has affected over 1.5 million vehicles globally, causing significant disruptions to both production and deliveries.
CEO Oliver Zipse acknowledged the severity of the situation, stating, “After an exceptionally challenging third quarter, we are back on track for higher profits in the fourth quarter and confident in achieving our adjusted financial targets for the full year.”
The brake problem not only led to delays in deliveries but also impacted customer confidence, with an estimated 320,000 cars facing delivery delays. This has exacerbated BMW’s struggles in a challenging market, particularly in China, where sales have fallen by a third.
Despite these challenges, BMW remains focused on maintaining its long-term profitability. In September, the company scaled back its projections for the year, citing the slow Chinese demand and the unforeseen issues with the braking system as key factors. The global automotive market continues to face increasing competition, with Volkswagen and Mercedes-Benz also reporting declines in China due to a weak economy and intense market pressures.
As the company works to resolve these production delays and improve its supply chain, BMW’s financial outlook for the fourth quarter remains optimistic, and it is committed to meeting its targets despite the setbacks from the brake issue.
