BMW cuts 2024 outlook on Continental brake issues, shares plunge
BMW now expects EBIT margin of 6-7% in 2024
Continental says some braking systems need to be replaced
BMW shares down 11.7%, Continental shares down 10%
Adds share price benchmark in paragraph 2, Citi analysts in paragraph 7
By Paolo Laudani and Christina Amann
Sept 10 (Reuters) -BMW BMWG.DE cut its 2024 profit margin outlook on Tuesday due to sluggish demand in its key Chinese market and problems related to a braking system supplied by Continental CONG.DE, sending the carmaker's shares to a near two-year low.
Shares in BMW tumbled nearly 12%, on track for their biggest intra-day loss in four and half years, while Continental shares were also down more than 10%, making them the top decliners on Germany's benchmark DAX .GDAXI index and also dragging down European auto stocks.
BMW said delivery hold-ups linked to the braking system would have a negative sales effect in the second half of the year, adding more than 1.5 million cars were affected.
Around 1.2 million of those vehicles have been already delivered to clients and can be remotely checked for faults via over-the-air software, but the remaining 320,000 vehicles cannot be handed over for now, BMW said.
Overall, BMW said it will incur "a high three-digit million amount" in warranty costs in the third quarter as a result.
BMW also flagged ongoing muted demand in China affecting sales in the country, joining the group of automakers facing difficulties in the world's second-biggest economy, which is also the world's largest auto market.
"With China only getting tougher, and BMW overexposed to China, and with H2 recovery expectations looking a bit optimistic, it remains tough to see the positive catalyst for BMW," Citi analysts wrote.
The German luxury carmaker said it now expects its margin on earnings before interest and tax to be between 6% and 7% for 2024, having previously guided for a figure between 8% and 10%.
Deliveries are now expected to fall slightly in 2024, while the group had previously forecast a slight increase.
Continental in a separate statement said that only a "small proportion" of the braking systems it produces and supplies to BMW would be partially replaced due to an electronic component that it said is possibly impaired.
The car supplier said it had set aside provisions in the mid double-digit million euro range and that it assumes that this amount will cover the warranty.
Reporting by Paolo Laudani and Christina Amann; Additional reporting by Stefanie Geiger and Danilo Masoni; Writing by Christoph Steitz; Editing by Chizu Nomiyama, Jan Harvey and Mark Potter
免责声明: XM Group仅提供在线交易平台的执行服务和访问权限，并允许个人查看和/或使用网站或网站所提供的内容，但无意进行任何更改或扩展，也不会更改或扩展其服务和访问权限。所有访问和使用权限，将受下列条款与条例约束：(i) 条款与条例；(ii) 风险提示；以及(iii) 完整免责声明。请注意，网站所提供的所有讯息，仅限一般资讯用途。此外，XM所有在线交易平台的内容并不构成，也不能被用于任何未经授权的金融市场交易邀约和/或邀请。金融市场交易对于您的投资资本含有重大风险。
所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。
本网站上由XM和第三方供应商所提供的所有内容，包括意见、新闻、研究、分析、价格、其他资讯和第三方网站链接，皆保持不变，并作为一般市场评论所提供，而非投资性建议。所有在线交易平台所发布的资料，仅适用于教育/资讯类用途，不包含也不应被视为适用于金融、投资税或交易相关咨询和建议，或是交易价格纪录，或是任何金融商品或非应邀途径的金融相关优惠的交易邀约或邀请。请确保您已阅读并完全理解，XM非独立投资研究提示和风险提示相关资讯，更多详情请点击 这里。
