BMW targets margin recovery with cuts and local production

BMW is targeting margin recovery with cuts and local production, as outlined by Bernstein analysts. The German premium carmaker will reveal its strategy update at a capital markets day for investors, seeking to rebuild margins after a series of profit warnings tied to weak performance in China. In June, BMW issued a shock profit warning, its third in just over three years linked to the challenges posed by falling sales in China and US tariffs.

The company has responded to the situation with a redundancy programme affecting about 8,000 jobs in Germany, joining Volkswagen and Mercedes-Benz in slashing costs. BMW aims to achieve a mid-term margin target of 3% to 5% for its automotive division by 2028, with the goal of restoring margins to 8% to 10% by the early 2030s. The strategy update will include plans for more local production, innovative products, and growth in premium offerings.

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