Factbox-Key points of BMW's strategy update

BMW Strategy Update: Main Targets and Innovations for the Next Decade

Key Highlights from BMW's Capital Markets Event

FRANKFURT, Sept 30 (Reuters) - BMW is holding a two-day capital markets event to brief investors about the premium carmaker's strategy, the first for new CEO Milan Nedeljkovic, who took over in May.

Here are the main points of the update:

Targets

Profit Margin and Cash Flow Goals

- The group aims for an 8% to 10% automotive profit margin by the start of the next decade and automotive free cash flow of more than €7 billion ($8 billion). That compares with 2026 targets of 1% to 3% and more than €2.5 billion, respectively

Interim Targets for 2028

- In 2028, the group expects an operating margin of 3% to 5% as an interim target, with free cash flow of more than €5 billion

Portfolio and Organizational Changes

- The group plans to reduce model variants across its portfolio, and there will be no successor to the BMW2 Series Active Tourer

- By mid-2027, BMW will cut the number of divisions and related management roles by 20%, "with a comparable reduction at the organisational levels below"

China

Production and Market Strategy

- In China, local production of high-volume categories will be expanded, while imports will be limited to models with the highest profit margins

Localization Targets

- BMW aims to raise the share of locally manufactured vehicles specifically tailored to Chinese customer preferences to at least 95% by 2030. The current level is "just under 90%", it said

Export Expansion

- BMW is considering expanding exports of vehicles made in China to Southeast Asian markets

US

Luxury SUV Expansion

- BMW plans to expand its luxury SUV offering with a new model positioned above its current top-end BMW X7 series

Production and Regionalisation

- With its Spartanburg plant in South Carolina operating at full capacity due to the popularity of luxury SUVs, BMW is striving for "greater regionalisation" to expand global production of these models in other sales regions

Europe

Neue Klasse Electric Model

- BMW plans to introduce a new entry-segment fully electric model from the Neue Klasse range in 2028

Artificial Intelligence

AI Integration in Value Chain

- BMW plans to significantly expand the role of AI in its value chain

End-to-End AI Support

- In future, AI is expected to provide end-to-end support, from "initial technical requirements to testing and release"

Autonomous Driving

Navigation-Guided Assistance

- BMW will offer navigation-guided driver assistance in Germany based on the DCAS regulation, with other countries following in stages, such as the US

Critical Materials

Partnerships and Supply Chain Security

- The company will focus on new partnerships, including with competitors within the European Union, to secure supplies of critical raw materials and components, including semiconductors

Exchange Rate

($1 = 0.8807 euros)

(Compiled by Christoph Steitz. Editing by Mark Potter)