NEW YORK – BMW is revising its sales and earnings targets for the 2024 fiscal year after dealing with the expenses of a braking system recall impacting over 1.5 million cars worldwide.

BMW Group, headquartered in Munich, announced on Tuesday that the costs associated with rectifying a faulty integrated braking system supplied to them would amount to a high three-digit million euros in the third quarter. The company is also expecting a negative impact on sales due to halted deliveries of affected vehicles still in stock.

These issues surfaced after BMW discovered a defect during an internal quality check. Though a safety recall was initiated in February, subsequent cases extending beyond the original recall prompted further action.

Approximately 1.53 million vehicles across five countries, including China, the U.S., Germany, Korea, and France, are affected. The impacted cars, manufactured between June 2022 and August 2024, include various BMW models, Rolls-Royce Spectre, and MINI Cooper and Countryman.

Out of the total affected vehicles, 1.2 million are already with customers, while the rest are with BMW or at dealerships. BMW has developed diagnostic software to detect potential brake faults, ensuring prompt replacement if needed.

In response, BMW’s automotive segment has adjusted its 2024 earnings forecast due to recall costs and subdued demand in China. The company now anticipates a decrease in deliveries for the year, impacting profitability metrics.

Shares of BMW and its supplier Continental AG witnessed declines following the announcement.