BMW sets margin targets in recovery plan

BMW has outlined a recovery strategy built around cost reductions, simpler operations, greater use of artificial intelligence and new models, as the German automaker seeks to restore profitability after a June profit warning tied to weakness in China. The company is targeting an automotive operating margin of 3% to 5% by 2028, rising to 8% to 10% in the early 2030s, compared with 2.3% in its latest reported results. The targets are goals, not achieved results. BMW’s plan includes reducing the number of divisions and associated management roles by 20% by mid-2027. A redundancy programme is expected to affect about 8,000 jobs in Germany. The company also intends to simplify its model range, reduce variants, shorten development times and deepen supplier partnerships. BMW says AI will be used more extensively in its operations, including in areas such as crash simulations and driver assistance. Product plans include an entry-level electric vehicle for Europe from 2028 and a luxury SUV positioned above the X7. BMW also plans to expand its M and Alpina performance ranges.