BMW’s major recall hits 1.5 million cars, including Rolls-Royce Spectres, amid braking fault

BMW AG is grappling with a significant braking system defect that could cost the German carmaker close to €1 billion ($1.1 billion) in repairs, following two years of mounting customer complaints. The issue, which affects as many as 1.5 million vehicles, has prompted a large-scale recall across several of the company’s luxury brands, including Rolls-Royce.

The initial complaints regarding faulty brakes began surfacing in June 2022, but it was not until August 2024 that BMW fully grasped the magnitude of the problem, according to a recall document obtained by Bloomberg News. The defective part, supplied by auto-component manufacturer Continental AG, was marketed as an innovative, lighter, and more efficient system. However, it soon became clear that this system introduced risks, with interference impacting the electric signals controlling the brakes.

Reportedly, a formal investigation into the braking issue commenced in October 2023, leading to BMW’s first recall of approximately 80,000 vehicles in the United States in February 2024. Since then, the scope of the recall has grown substantially, now covering 1.5 million cars, including flagship models like the 7-Series sedan, high-performance XM SUVs, and even the $420,000 Rolls-Royce Spectre.

“This isn’t just a routine recall; it’s a major blow,” said Ferdinand Dudenhöffer, head of the Center for Automotive Research in Bochum, Germany. He also pointed out that BMW’s recent emphasis on tightening quality control measures indicates broader concerns within the company regarding its supply chain.

BMW, known for prioritizing long-term stability over short-term gains, is feeling the financial pressure, reflected in the company’s margins. A profit warning issued last week wiped €5 billion off BMW’s market value, underscoring the severity of the issue for a brand widely considered a leader in automotive technology.

According to the recall notice, the braking system in question, referred to as "brake-by-wire," uses electronic signals rather than traditional hydraulic mechanisms to operate. However, a critical feature designed to reduce the force needed to apply the brakes—especially important in emergency situations—failed in some cases. Weaker drivers could struggle to stop the vehicle, raising the risk of accidents, though no crashes or injuries have been reported so far.

Continental traced the flaw to a manufacturing plant in Hungary, where insufficiently clean working conditions allowed contaminants such as dust or smudges to compromise the integrity of the brake circuit boards. As a result, some components were less effective, leading to the widespread recall.

While the ultimate cost of the repairs remains uncertain, the company anticipates months of work ahead to address the issue. The recall has already affected 688 Rolls-Royce Spectre models built between January 2023 and July 2024. In the U.S., Rolls-Royce issued an urgent halt to sales of the Spectre, advising dealers to cease deliveries of vehicles with potentially compromised brakes.

Experts warn that this incident is emblematic of broader issues within the automotive industry. Andrew Graves, an automotive analyst at the University of Bath, noted that an increasing number of recalls are raising serious concerns about automakers' ability to thoroughly vet their supply chains.

For BMW, this crisis arrives at a challenging time for Germany’s automobile sector, which is already contending with a slowdown in electric vehicle sales and stiff competition from Chinese manufacturers.

(With inputs from Bloomberg)