BMW will recall about 1.5m automobiles over issues with their brakes, wiping €4.3bn (£3.7bn) off the worth of the German carmaker.
The corporate, which additionally makes Rolls-Royce and Mini, mentioned the product recall may have a “adverse worldwide gross sales impact within the second half of the yr”.
Shares plunged by as a lot as 9.6pc because it mentioned it could take a “excessive three-digit million” euro hit to its funds within the three months to September in consequence.
It additionally reduce its revenue steerage, with margins this yr anticipated to be between 6pc and 7pc, down from 8pc to 10pc beforehand.
The posh automobile model has already been grappling with weakening demand from China, which has stricken the German automobile business.
It reported an 8.6pc fall in internet revenue through the second quarter to €2.7bn, with revenues down 0.7pc to simply beneath €37bn.
It got here as Volkswagen advised the German metalworkers’ union IG Metall that it could scrap a variety of labour agreements together with a assure of jobs till 2029 at six German crops.
Volkswagen is cancelling the decades-old employment ensures as a part of a cost-cutting drive that has triggered a showdown with employees as Volkswagen struggles to compete in opposition to cheaper Asian rivals.
The transfer follows a risk that it may shut crops on German soil for the primary time in its 87-year historical past, which despatched shockwaves by the worldwide autos sector and prompted high-level German authorities concern.
The top of the corporate’s works council has vowed fierce resistance in opposition to lay-offs and manufacturing unit closures, blaming administration for Volkswagen’s ills.
Volkswagen mentioned that it wanted “to cut back prices in Germany to a aggressive stage, permitting us to spend money on new applied sciences and merchandise independently. Contemplating the competitors and the placement in Germany, that is now essential. We should act decisively and safe a profitable future”.
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