BMW is set to recall approximately 1.5 million vehicles due to brake issues, leading to a €4.3 billion drop in its market value. The German automaker, which also produces Rolls-Royce and Mini, announced that the recall will negatively impact worldwide sales in the second half of the year.
The recall has caused BMW shares to plummet by 9.6%, with the company expecting a significant financial hit in the high three-digit million euros range for the third quarter. This, combined with weakening demand in China, has prompted BMW to lower its profit margins forecast for the year to 6-7%, down from the previously expected 8-10%.
In related news, Volkswagen is also facing turmoil, with plans to scrap long-standing labor agreements, including job guarantees at six German plants. This cost-cutting effort is aimed at making Volkswagen more competitive against cheaper Asian rivals, sparking backlash from the company’s works council and raising concerns within the German government.
