BMW took two years to discover billion-euro car fault

The company’s shares plummeted last week on its profit warning as it revealed the scale of the problem, with €5bn at one stage being wiped off its value.

The braking system fault that has led to BMW recalling as many as 1.5m cars took more than two years to find, according to leaked documents seen by Bloomberg.
The report said customers and dealers began to complain about the faulty breaks as long ago as June 2022.
However, it was not until last month that the German car maker understood how many cars might be affected.
BMW has said the cost of the fix to the braking system fault may be as much as €1bn.
The company’s shares plummeted last week on its profit warning because of the scale of the problem, with €5bn being wiped off the value at one stage.
Some 80,000 vehicles in the US were recalled in February as a result of BMW’s in-depth review of the problem which was launched in October 2023.
The figure has since soared and appears to be an across-the-board problem for BMW and includes a number of Rolls-Royce brands.
“This isn’t just an ordinary recall, this is a significant shock,” Ferdinand Dudenhöffer, director at the Centre for Automotive Research in Bochum was quoted as saying by Bloomberg.
“What’s also noteworthy is that BMW has been stepping up quality control suppliers with a taskforce, indicating they see risks more broadly.
“BMW is usually very cautious, preferring stability over short-term peaks, which is reflected in their margins,” he added.
A spokeswoman for BMW told Bloomberg it would take time to discover the scale and financial impact of the recall.
The defect has reportedly been traced back to a plant in Hungary where smudges or dust on circuit boards meant performance was affected. There have been no reports of accidents or injuries as a result of the fault.
Bloomberg quoted car maker analyst Andrew Graves, also emeritus professor at the University of Bath, as saying that an increasing number of recalls is raising “serious questions” over due diligence of the car makers’ supply chains. 
“Perhaps the sector needs to focus and concentrate on core competences to avoid such issues in the future,” he added.