Brake problem, BMW will recall 1.5 million cars from the market

It took BMW more than two years to identify and assess the failure in its cars' braking system, according to documents uncovered by Bloomberg. BMW has decided to recall 1.5 million cars from the brands belonging to its portfolio.

The report says customers and dealers began complaining about brake defects as early as June 2022. However, it was only last month that the German automaker announced how many cars could be affected by the brake failure.

Up to 1.5 million cars are fitted with the faulty part, which was supplied by auto parts maker Continental AG and touted as a lighter and more efficient system, Reuters reports.

Shares fell as the car company revealed the extent of the problem

The company's shares fell last week after the extent of the problem was revealed, which is estimated to initially wipe about 5 billion euros off its value, Bloomberg reports.

BMW has announced that the cost of repairing the brake system failure could reach one billion euros, reports Euronews.

About 80,000 vehicles in the US were recalled in February as a result of BMW's in-depth review of the problem, which began in October 2023.

The number has increased and appears to be a general problem for BMW, which includes a number of brands it owns as far as Rolls-Royce.

"It's not just an ordinary comeback, it's a big shock," said Ferdinand Dudenhöffer, director of the Center for Automotive Research in Bochum, according to Bloomberg.

What's also worth noting is that BMW is beefing up its quality control suppliers with a task force, indicating they're looking at risks more broadly.

"BMW is typically very cautious, preferring stability over short-term shocks, which is reflected in its profit margins," he added.

Bloomberg quoted carmaker analyst Andrew Graves, also a professor emeritus at the University of Bath, who said "the increasing number of recalls raises serious questions" about due diligence in carmakers' supply chains. "Perhaps the sector should focus on core competencies to avoid such issues in the future," he added.

Under US law, automakers risk fines if they don't promptly report safety issues to the National Highway Traffic Safety Administration (NHTSA). In some cases, a manufacturer may not be aware of a defect, even after a long period of time. Therefore, NHTSA did not fine BMW for the brake failure.

A BMW spokesman said it took time to assess the scale and financial impact of the recall, adding that the automaker needed to discuss the matter with officials in several markets and estimate how much repairs would cost, Bloomberg reports.