BMW AG (ETR:BMW) faced “extraordinary challenges” in the third quarter, as technical issues with its Integrated Braking System (IBS) and a decline in Chinese demand impacted its financial performance.
This resulted in revenues falling by 15.7% year-on-year to €32.41 billion, while operating profit (EBIT) dropped 61% to €1.7 billion.
The IBS-related technical actions, which led to more than 1.5 million vehicles being recalled, led to a profit warning in Septemer and subsequent delivery stops and delays.
Compounded by weak Chinese demand, BMW delivered 540,881 vehicles in the third quarter, marking a 13% drop from the same period last year.
“After the extraordinary challenges in the third quarter, we are looking ahead: In the fourth quarter, we are back on track for stronger earnings in order to achieve our annual targets, despite planned high upfront expenditures,” said chairman Oliver Zipse.
Despite these obstacles, BMW confirmed its adjusted full-year financial guidance, anticipating sequentially higher deliveries and a stronger product mix in the final quarter.
BMW shares fell another 4% today, bringing year-to-date losses above 31%.