BMW counts cost of global 1.5 million vehicles recall
German car manufacturer BMW has revised down its earnings targets for 2024 after shouldering the costs of a global recall of 1.5 million cars to address issues with the braking system.
It estimates the costs from the product recall event could total in the “high” three-digit millions of euros for the third quarter of the year. The group also warned that sales could be impacted, with deliveries of new vehicles being delayed because of the potential fault.
The affected vehicles were issued with a recall in February this year for checks on the integrated brake system, manufactured by supplier Continental. There are concerns over a defect in the ABS and stability controls systems that could cause power braking assistance to fail.
The first recall notice covered 80,000 vehicles, but more cars were recalled beyond the scope of the original notice, extending to 370,000 vehicles in China, 270,000 in the US, 150,000 in Germany, 70,000 in Korea and 60,000 in France.
BMW said diagnostic software will alert the driver of a potential brake fault, which can be replaced free of charge at a dealership. It also assured drivers that a malfunction is very unlikely and that it is not aware of any incident as a result of the defect.
The system is used in several models of cars manufactured by BMW since June 2022, including some BMW X models, the Mini Cooper and Countryman, and the Rolls-Royce Spectre.
Continental said it anticipates only needing to fully replace the braking systems in a small proportion of affected vehicles. It has made financial provisions to cover the warranty, which it estimates will cost in the mid-double-digit millions of euros range.
