BMW Targets 8-10% Automotive Margin, Deepens China Focus in New Strategy

German automaker BMW on Wednesday announced a new long-term strategy focused on significantly boosting profitability, streamlining its vehicle portfolio, and deepening its manufacturing footprint in key markets like China. The update, presented by new CEO Milan Nedeljkovic at a capital markets event, sets ambitious financial targets for the start of the next decade.

Ambitious Financial Overhaul

BMW is targeting an automotive profit margin of 8% to 10% by the early 2030s, a substantial increase from its 2026 forecast of 1% to 3%. The company also aims for an automotive free cash flow of more than €7 billion ($8 billion), compared to a 2026 target of over €2.5 billion.

As part of its roadmap, the automaker set an interim operating margin target of 3% to 5% for 2028, with free cash flow expected to exceed €5 billion. To achieve these goals, BMW plans to reduce model variants across its lineup and will not produce a successor to the BMW 2 Series Active Tourer.

Global Strategic Realignment

The company detailed specific strategic shifts for its major sales regions, with a strong emphasis on localization and high-margin vehicles.

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• China: BMW will expand local production of high-volume models and aims to have at least 95% of vehicles sold in the country be manufactured locally by 2030, up from just under 90% currently. The company is also considering exporting vehicles made in China to other markets in Southeast Asia.
• United States: The automaker plans to introduce a new luxury SUV positioned above its current top-end X7 model. With its Spartanburg, South Carolina, plant operating at full capacity, BMW is pursuing greater "regionalisation" to expand SUV production globally.
• Europe: A new, fully electric entry-level model from its upcoming Neue Klasse architecture is slated for introduction in 2028.

Operational Efficiency and Technology

Beyond its financial and regional goals, BMW is implementing significant operational changes. The company plans to cut the number of its divisions and related management roles by 20% by mid-2027, with similar reductions expected at lower organizational levels.

Technology will play a larger role, with artificial intelligence set to be integrated across the value chain, from vehicle development to testing. BMW also confirmed it will offer navigation-guided driver assistance in Germany, with a phased rollout planned for other markets. To secure its supply chain, the company will seek new partnerships, including with competitors, to source critical raw materials and semiconductors.