The German automobile manufacturer BMW was forced on Tuesday to lower its annual targets due to a brake system defect in its vehicles, prompting the group to initiate recalls or halt deliveries affecting 1.5 million cars.
The issues pertain to the Intelligent Brake System (IBS) linked to a supplier whose name or technical details BMW did not disclose.
Bloomberg News reported that the German equipment manufacturer Continental is the sole supplier of these systems to BMW, which uses them in its BMW, Mini, and Rolls-Royce brands. As a result of the recalls, BMW's vehicle deliveries in 2024 are expected to experience a "slight decline" year-on-year, while a slight increase was initially anticipated, following a record level of 2.56 million units in 2023.
According to a company statement, this will also impact the group's profits, with the operating margin in BMW's automotive sector, a key division of the company, now expected to range between "6 and 7 percent," compared to the previous estimate of 8 to 10 percent. The group's taxable income, which also includes motorcycle manufacturing, is expected to show a "significant decrease," whereas previous forecasts indicated a "slight decline."
On the Frankfurt Stock Exchange, BMW and Continental shares lost more than 7 percent following this announcement.
BMW Electric Vehicle Sales Rankings
In recent years, BMW has significantly ,
expanded its electric vehicle (EV) lineup, making a strong push into the growing market for sustainable transportation. The company’s flagship electric models, including the BMW i4, iX, and the Mini Electric, have been well-received, contributing to rising sales figures in the EV segment.
As of the latest reports, the BMW I4 has emerged as a top seller in the company's EV portfolio, combining the brand's performance legacy with cutting-edge electric technology. The iX, BMW's luxury electric SUV, has also seen strong demand, especially in markets like Europe and North America, where consumer interest in premium electric vehicles is on the rise.
Overall, BMW electric vehicle sales have shown impressive growth, helping the automaker solidify its position in the competitive EV market. As the company continues to innovate and expand its electric offerings, it is well-positioned to meet the increasing global demand for clean and efficient vehicles.
The market share of BMW in the global market.
BMW is one of the world's leading luxury car manufacturers and has made a strong entry into the electric vehicle (EV) market in recent years. However BMW share of the global electric vehicle market remains modest compared to some of its key competitors, such as Tesla, BYD, and Volkswagen who dominate a larger portion of global EV sales. In 2023 and the current year, BMW's share of the electric vehicle market was estimated at around 5%, a relatively small percentage compared to other companies that allocate significant resources to developing and manufacturing electric vehicles.
BMW is heavily investing in transitioning its production to electric and hybrid vehicles, aiming to become a leader in this field over the next decade. The company plans to increase its market share by launching several new electric models. For instance, the BMW iX and i4 are part of the company's efforts to offer advanced electric vehicles that meet the needs of consumers looking for luxury, eco-friendly cars. Additionally, BMW is investing in improving battery technology and extending the range of electric vehicles to make them more attractive to consumers.
The challenges BMW faces include intense competition from companies that entered the EV market earlier, such as Tesla, which holds a significant share of the market, especially in the United States and Europe. BMW also faces challenges from Chinese companies like BYD, which benefit from higher production efficiency and the ability to manufacture electric vehicles at more competitive prices.
BMW views the coming period as crucial for increasing its market share, as the company aims for at least half of its global sales to come from electric vehicles by 2030, as part of a broader strategy focused on environmental sustainability and reducing carbon emissions.
