BMW cut its profit margin forecast for the year Tuesday due to sluggish demand in China, its key market, and problems related to a braking system supplied by Continental, sending the carmaker’s shares close to a two-year low.
The German luxury carmaker said delivery hold-ups linked to the braking system would have a negative effect on sales in the second half of the year, adding that more than 1.5 million cars were affected.
Overall, BMW said, it will incur “a high three-digit-million amount” in warranty costs in the third quarter as a result.
BMW also flagged ongoing muted demand in China affecting sales in the country, joining the automakers facing difficulties in the world’s second-biggest economy, which is also the world’s largest auto market.
“Despite stimulus measures from the government, consumer sentiment remains weak,” BMW said.
Persons:
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Organizations:
BMW, Continental, ” BMW
Locations:
China