In major news on German stocks, BMW AG (DE:BMW) has been named in a U.S. Senate inquiry for importing cars with banned Chinese parts. A recent investigation by the U.S. Congress revealed that BMW, along with Jaguar Land Rover (owned by Tata Motors Limited, India), and Volkswagen (DE:VOW) utilized parts from a Chinese supplier, which is banned in the U.S. due to suspected ties to forced labor.
BMW shares are trading down by 0.46% as of writing.
BMW is a leading car manufacturer known for its high-end vehicles worldwide. The company owns brands like BMW, MINI, Rolls-Royce, and BMW Motorrad in its portfolio.
BMW Caught in Controversy
In 2021, Congress passed the Uyghur Forced Labor Prevention Act (UFLPA) to enhance the enforcement of laws preventing the import of goods from China’s Xinjiang region, where forced labour practices are believed to be used for production. Under this law, a Chinese supplier was banned in December 2023 for involvement in forced labour programs in Xinjiang.
The investigation revealed that BMW continued importing products containing these banned components until at least April 2024, violating U.S. law. According to the Senate’s report, BMW shipped at least 8,000 Mini Cooper vehicles to the U.S. containing these parts.
BMW Group stated in an email that it has taken measures to stop importing the affected products. The company also added that it will conduct a service action to replace the specific parts, emphasizing that it maintains strict standards and policies on employment practices, human rights, and working conditions.
BMW’s Q1 2024 Results Snapshot
Earlier this month, BMW announced its results for the first quarter of 2024, marking a successful start to the year. In Q1, the company delivered approximately 83,000 all-electric vehicles, boosting its BEV (battery electric vehicle) sales by about 28%. BMW delivered 594,533 vehicles in the first quarter, which was 1.1% higher compared to the same period last year.
Meanwhile, BMW’s EBT (earnings before tax) margin reached 11.4%, surpassing the strategic target of over 10%.
The group anticipates that deliveries of fully electric and premium vehicles will contribute to a slight increase in automotive deliveries in 2024.
Is BMW a Good Stock to Buy?
According to TipRanks, BMW stock has a Hold rating based on 17 recommendations, including five Buys, 10 Holds, and two Sell recommendations. The BMW share price forecast is €108.20, which represents a 14.5% change from the current price level.
