Frankfurt – BMW held a two‑day capital‑markets event on September 30 to present the first strategy update under new CEO Milan Nedeljkovic, who assumed the role in May. The automaker used the forum to lay out a series of financial and operational targets that it says will position the company for stronger profitability and growth through the end of the decade.
Financial targets and restructuring
The group aims to achieve an automotive profit margin of 8% to 10% by the start of the next decade, up from the 2026 target range of 1% to 3%. Correspondingly, BMW expects automotive free cash flow of more than €7 billion (about $8 billion), compared with the 2026 goal of over €2.5 billion. An interim operating‑margin target of 3% to 5% is set for 2028, with free cash flow of at least €5 billion.
To support these financial goals, BMW plans to cut the number of divisions and related management roles by 20% by mid‑2027, with a comparable reduction at lower organisational levels. The company also announced it will reduce the variety of model variants across its portfolio and will not introduce a successor to the BMW 2 Series Active Tourer.
China strategy
In China, BMW intends to expand local production of high‑volume models while limiting imports to those with the highest profit margins. The automaker aims to raise the share of locally manufactured vehicles tailored to Chinese customer preferences to at least 95% by 2030, up from “just under 90%” today. BMW is also evaluating the possibility of exporting China‑made vehicles to Southeast Asian markets.
U.S. and European plans
In the United States, BMW will broaden its luxury‑SUV lineup with a new model positioned above the current top‑end X7. The Spartanburg, South Carolina plant is already operating at full capacity, and the company is seeking “greater regionalisation” to spread production of these models to additional sales regions.
In Europe, BMW plans to launch a new entry‑segment fully electric model from its Neue Klasse range in 2028, reinforcing the brand’s commitment to electrification.
Technology and supply‑chain initiatives
BMW said it will significantly expand the role of artificial intelligence across its value chain, using AI to support everything from initial technical requirements to testing and release. The automaker also announced plans to offer navigation‑guided driver assistance in Germany under the DCAS regulation, with other markets, including the United States, expected to follow in stages.
To secure critical raw materials and components such as semiconductors, BMW will pursue new partnerships, including collaborations with competitors within the European Union.
Outlook
BMW’s updated strategy reflects a focus on higher profitability, streamlined operations, and accelerated electrification, while leveraging AI and stronger supply‑chain cooperation. The company’s targets are anchored in a belief that a leaner organisational structure and a more localized production footprint will deliver the cash flow needed to fund future growth.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
