BMW: Automaking Profit Margin to Hit Lower End of Guidance
German automaker BMW AG anticipates a lower automaking profit margin in 2024 due to reduced sales of its premium vehicles. The company expects its earnings before interest and taxes (EBIT) margin to fall within the lower half of its previously forecasted range of 6% to 7%.
BMW's revised margin outlook follows a recall of approximately 1.5 million cars, which impacted profits in the third quarter of 2023. The recall, related to a faulty braking system, resulted in a provision of nearly €1 billion.
BMW shares declined by up to 2.8% on the Frankfurt Stock Exchange and have lost 17% over the past year. The weakness in demand for German carmakers, particularly in China, has contributed to the decline.
Despite the overall decline in car sales, BMW's electric vehicle segment has been a bright spot. The company plans to launch its first Neue Klasse plug-in car in late 2025.