The finances of the BMW automobile concern have not been so bad for the last four years. As Bloomberg reports, the results for the third quarter of 2024 simply shock market experts. The reason is too high costs of repairing hidden defects and weak demand in the Chinese market.
BMW’s profit before interest and taxes was only 2.3 per cent. This is well below the target of at least 6 per cent for 2024 and around the level of the second quarter of 2020, when global trade had to contend with the effects of the coronavirus pandemic.
In September, BMW had to adjust its profit forecasts for this year when it recalled 1.5 million vehicles due to a faulty brake system. This cost the giant $1.1bn, plus BMW also had to suspend deliveries of hundreds of thousands of more expensive cars.
Moreover, weakening demand in China and Europe has also affected sales and squeezed margins. In the People’s Republic of China, the biggest market for BMW, sales fell 30 per cent in three months as consumers cut spending on luxury goods and local carmakers offered cheaper alternatives.
The media also previously reported big problems at Germany’s Bosch.
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