BMW targets margin recovery with cuts and local production
The automaker aims to lift its margin to 3% to 5% by 2028 after a 37% drop in operating profit, analysts said.
- On Wednesday, BMW shares rose more than 3% as the German automaker presented its recovery plan at a two-day Capital Market Day event in Munich, targeting automotive operating margins of 3% to 5% by 2028.
- Following a 19% drop in vehicle sales in China, BMW initiated a voluntary redundancy program for around 8,000 employees and a 20% cut to management roles by mid-2027 to slash costs.
- Separately, BMW will invest €2 billion in German production facilities, including a battery plant in Irlbach-Stra, to "boost regional value creation, secure skilled jobs and add a future location to the industrial ecosystem of Lower Bavaria."
- To drive growth, the company will launch a luxury SUV and expand its Neue Klasse and Alpina ranges, while adopting a "local for local" approach to manufacturing in key markets like China.
- Bernstein analyst Stephen Reitman noted that "BMW understands the solution is not simply cost-cutting. It is also pursuing growth with innovative products," as the company aims to restore margins to 8% to 10% by the early 2030s.
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Reformatorisch Dagblad
Automaker BMW plans to eliminate 20 percent of management positions next year. The company aims to save costs by doing so. BMW expects to be able to delegate the tasks currently performed by managers to AI. According to a statement, this will make the company more agile again.
BMW Targets Shedding 20% of Managers Through AI in Savings Push
BMW AG is planning to deploy artificial intelligence to help eliminate a fifth of management roles by the middle of next year, part of an agreed buyout plan designed to slash costs and boost profitability.
Zeit Online
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This should make the company faster. At the same time, the Munich-based companies hardly want to export cars to China in a few years.
Against the background of failures in the Chinese market, BMW is preparing steps to increase profitability - what will be done <p>BMW plans to invest €2 billion in production in Germany and revise its strategy. By 2028, profitability should increase to 3— 5%.</p>
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