BMW issues profit warning after brake failure

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BMW issues profit warning after brake failure
Photo: Matthias Schrader AP/TT

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The German car manufacturer BMW is issuing a profit warning after being forced to recall 1.5 million vehicles due to a brake fault. The fault has, according to the company, occurred at a subcontractor.

Tire manufacturer Continental has announced that the fault occurred with them, but that the cars are still safe to drive.

BMW now expects a significantly lower profit than what was calculated a year ago. The company is counting on an operating margin of 6 percent, compared to 8 to 10 percent according to earlier prognosis.

The brake fault is another setback for BMW, which has also been affected by a cooling demand for new cars in general. According to the company, a weak demand from China is also contributing to the revised prognosis.

The share is falling by around 7 percent after the announcement.

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By TTEnglish edition by Sweden Herald, adapted for local and international readers

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