BMW is facing significant challenges, with a major recall affecting the company’s largest European plant in Dingolfing, located in Lower Bavaria. Sluggish demand from China is also contributing to the disruption. Production at the plant will be halted on several days, with shifts being canceled. The impact is substantial.
Shifts Canceled Due to Reduced Demand
A BMW spokesperson informed the Bavarian Broadcasting Corporation (BR) that the reason for the disruption is reduced demand in China, along with delivery restrictions caused by issues with braking systems. These warranty costs alone are estimated by BMW to reach a nine-figure sum. Consequently, BMW is adjusting the “production volume at the Dingolfing location flexibly to the current situation” and will “reduce individual shifts as necessary,” according to company spokesperson Thomas Niedermeier.
Uncertainty Continues for BMW
It remains unclear on which specific days production at the plant will be halted. There are no concrete details yet on how the situation will unfold in the coming days or which shifts may be canceled.
According to BR, the Continental plant in Regensburg is likely not affected by the braking system issues. A request for confirmation is still pending. The company supplying the brakes to BMW stated on Tuesday that in rare cases, the brake assist system could fail, requiring drivers to apply more force to stop the vehicle.
Profit Forecast Downgraded
Approximately 18,500 people work at the Dingolfing BMW site, but it is currently unknown how many will be affected by potential shift cancellations, according to the spokesperson. Around 1,500 vehicles roll off the production lines daily at the Dingolfing plant. The site has been hit hard multiple times recently due to the ongoing chip shortage.
On Tuesday, it was revealed that a total of 1.5 million vehicles would need to be recalled, with about 1.2 million already in the hands of customers. BMW consequently “significantly” reduced its profit forecast for the current year, and its stock price also dropped noticeably.
In general, the company is currently facing economic challenges. The market and competitive environment for BMW’s motorcycle division is also “tense,” particularly in the United States and China.
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