On the Dash:
- BMW is targeting a 3% to 5% automotive division margin by 2028, with a longer-term goal of 8% to 10% in the early 2030s.
- The automaker plans about €2 billion in German production investment for the next-generation 3 Series and additional local production.
- BMW plans to expand its premium lineup with a new SUV above the X7 and broader M and Alpina ranges beginning in 2027.
BMW is preparing a strategy update to rebuild profitability after issuing repeated profit warnings tied to weak performance in China. The automaker is also due to unveil its strategy update later Wednesday at a capital markets day for investors.
According to a Reuters report, Bernstein said the automaker will set a mid-term margin target of 3% to 5% for its automotive division by 2028. By the early 2030s, BMW would aim to restore margins to 8% to 10%, a sharp improvement from its most recent result of 2.3%.
As part of its recovery strategy, BMW is expected to outline plans for increased local production. The automaker also announced an investment of approximately €2 billion in the German production of its next-generation 3 Series sedan. Bernstein noted that BMW’s European and U.S. plants are currently operating at full capacity, while China remains the primary area in need of production adjustments and capacity flexibility.
Bernstein identified BMW’s Neue Klasse lineup as central to the recovery plan, with the electric iX3 SUV set to lead the range. The automaker is combining new technology and products with its efforts to rebuild margins. Additionally, the company plans to introduce a luxury SUV positioned above the X7 and intends to expand its M and Alpina ranges starting in 2027.
Further, Bernstein emphasized that the strategy focuses on growth through new products rather than relying solely on cost reductions. BMW’s latest profit warning marks the third such warning in over three years, driven by weakness in the Chinese market. The automaker has also launched a voluntary redundancy program expected to affect around 8,000 jobs in Germany. Nevertheless, this strategy update comes as European automakers face weaker sales in China and tariffs in the U.S.
