By Investing.com — BMW (ETR:BMWG) has posted a 13% slide in third-quarter group-wide sales due in part to a steep slide in demand in China and a “globally challenging market.”
The German luxury car maker reported group automotive sales of 540,882 units in the quarter in an update. For the year until September, the figure has slipped by 4.5% compared with the corresponding period last year to 1,754,158.
Delivery stops linked to a braking system recall that impacted more than 1.5 million vehicles worldwide “significantly” dented its performance in the third quarter, BMW noted.
The Munich-based company previously slashed its profit and sales targets for its 2024 fiscal year due to the actions, which were related to faulty braking systems from one of its suppliers.
At the time, BMW said the financial hit would be in the “high three-digit million (euro) amount” for the third quarter.
A BMW spokesperson told the Associated Press in September that the issue was first identified during an internal quality check. This led to an initial recall in February, although the AP reported that additional cases “beyond the scope of the original recall” have also been identified.
On Thursday, the owner of the Mini and Rolls-Royce (OTC:RYCEY) brands also flagged a “difficult market environment” in China, the world’s largest automotive market. Sales in the region fell by 29.8% to 147,691 units in the third quarter and dipped by 13.1% to 523,638 in the year to September.
The braking system recall was expected to affect about 370,000 in China, BMW has said.
Last month, coupling together the costs of the recall and the weakness in China, BMW reduced its full-year automotive segment outlook for earnings before interest and taxes margin to 6% to 7, down from an earlier range of %8 to 10%. Worldwide deliveries are also seen decreasing slightly in 2024 compared to BMW’s prior projection for a slight increase.
However, BMW Board of Management member Jochen Goller said the firm’s fully-electric offerings are “winning over customers,” citing a 19.1% uptick in battery-powered EVs over the first nine months of the year. Sales in Europe also grew during that timeframe, Goller noted.
Shares in BMW were muted in early European trading following the announcement.