BMW AG, the German luxury automaker, has announced a downward revision of its financial guidance for 2025, citing persistent weakness in the Chinese market and tariff-related costs as key factors.

Revised Financial Projections

BMW has adjusted its financial outlook for 2025:

Factors Influencing the Revision

The company attributes this guidance cut to several factors:

1. Weak Sales in China: BMW is facing stiff competition from local manufacturers like BYD and Xiaomi, who are offering feature-rich electric vehicles (EVs) at competitive prices.

2. Tariff-Related Costs: The revision includes changes in assumptions about tariff reimbursements from US and German authorities.

3. Dealer Support: BMW plans to make payments to support its dealers in China.

Financial Impact

The combined effect of these factors is expected to result in a high three-digit million euro impact, which is now anticipated to materialize in the year following 2025, rather than in 2025 as previously expected.

Recent Developments

• BMW recently released its third-quarter data, which showed declining unit sales in China.
• The United States has lowered tariffs on auto imports from the European Union to 15%, retroactive to August 1.

Strategic Response

To address these challenges and boost future sales, BMW is positioning its next-generation EVs strategically:

• The company recently unveiled the iX3 SUV, part of its Neue Klasse line of electric vehicles.
• This new lineup is expected to play a crucial role in BMW's efforts to regain market share and drive sales growth.

While the revised guidance reflects current market challenges, BMW's focus on innovative EV offerings demonstrates its commitment to adapting to changing market dynamics and consumer preferences in the highly competitive automotive industry.

BMW AG, the renowned German luxury automaker, has announced a significant recall affecting at least 331,000 vehicles worldwide due to a potential fire hazard stemming from a starter motor defect. This recall encompasses a wide range of BMW models manufactured between 2015 and 2021, highlighting a serious safety concern for the company and its customers.

Recall Details

The recall is primarily focused on addressing a critical issue where water can infiltrate the starter motor, leading to corrosion. This corrosion may subsequently cause short circuits, potentially resulting in vehicle fires. The scope of the recall is extensive, covering:

• 195,000 vehicles in the United States
• 136,000 vehicles in Germany
• Additional vehicles in other markets, bringing the total to at least 331,000

Affected Models and Safety Measures

The defect impacts most of BMW's model lines produced within the specified six-year period. In response to this serious safety risk, BMW has issued an advisory to affected customers, urging them to take immediate precautions:

1. Park affected vehicles outdoors
2. Maintain a safe distance from buildings and other structures

These measures are recommended until the necessary repairs can be completed, emphasizing the gravity of the potential fire hazard.

Repair Process and Customer Support

BMW has committed to addressing this issue by providing free repairs to all affected vehicles. The repair process will involve:

• Replacing the faulty starter motors
• Replacing batteries in a limited number of vehicles

The company assures customers that these repairs will be carried out at no cost to the vehicle owners.

Previous Recall Context

This latest recall comes in the wake of a previous large-scale recall by BMW, which affected 1.5 million cars due to defective braking systems. That earlier recall had significant financial implications for the company, resulting in:

• Escalating repair costs
• A profit warning issued by BMW

The current starter motor recall adds to the challenges faced by the automaker in maintaining its reputation for quality and reliability.

Conclusion

As BMW works to address this serious safety issue, the recall serves as a reminder of the complex challenges faced by automakers in ensuring vehicle safety across diverse model ranges and production years. Affected BMW owners are strongly advised to follow the company's safety recommendations and arrange for the necessary repairs as soon as possible to mitigate the risk of potential vehicle fires.