The German luxury car maker, BMW, is currently experiencing production slowing for some models due to delivery problems from its supplier, Bosch. Shortage of parts is hampering productions of BMW.
Parts Shortage Effect on BMW Production
BMW plants located in South Africa and China are slowing productions of its compact and mid-sized cars. In a statement released by BMW spokesperson Michael Rebstock, he says that they are waiting for the steering gears for the BMW 1, 2, 3, and 4 Series from Bosch. The former is trying to minimize economic damages on its part and is trying to mend the situation within their capacity. They are also expecting their supplier (Bosch) to be a responsible partner and compensate for the damages in addition to tending on the issue quickly.
Parts Shortage Effect on Bosch
The effects are quite quick as a local partner of BMW at Shenyang, China, Brilliance China Automotive Holdings Ltd., plunged by 0.3% on Monday (2:27 pm) in Hong Kong Trading.
On the other hand, thru an e-mail communication, Bosch is attributing the delay to a sub-supplier located in Italy. However, it refused to name its sub-supplier in which it claims is having a hard time to meet the required deliveries. Yet, they are putting their best efforts to resolve the present problem.
Production Halts Cost BMW Millions
BMW is not yet able to quantify the extent of the damage the delay has for the company, but is positive enough to say that it is still “manageable.” Nonetheless, the management has no idea yet until when the production halts will cease, but they were able to form a task force to monitor and resolve the issue.
Experts are pronouncing that the production halts may cost BMW millions of euros in a single day of not operating.
BMW had a good start this year; it even topped its rival Mercedes-Benz. Deliveries of its X3 and X5 SUVs increased by 43 percent last March and has sold more than 31, 000 vehicles last quarter. The Munich-based company had managed to keep with its deliveries and that helped it beat the competition. It is the first time after several years that BMW was able to surpass the global sales count of Mercedes.
BMW Strong Start
Recounting the comment of Dr. Ian Robertson (BMW AG Board of Management Member for Sales and Brand BMW, he said last time that the company was able to achieve a strong start for 2017. He further added that he is confident that this year will be another record-breaking year for the company and even looks forward to sustain the lead in the industry.
However, BMW traded today at € 84.52 down by 0.04 which is lower by 0.05 percent compared to yesterday. The recent incident has made a big impact at Bosch which traded today at ₹23,549.95 down by 25.20, an amount lower by 0.11%.
BMW recent stocks are doing fine in the market. The recent issue on Bosch deliveries must be given adequate attention and must be resolved immediately to avoid huge impact and loss to the company. Bosch should do its part and accelerate its resolution to save its market reputation.