BMW AG will speed up the rollout of new models, as the German automobile giant is betting big on this move to counter a slump in China after another profit warning. The automaker is ramping up production of its Neue Klasse vehicles and phasing out the older models more quickly in a bid to ramp up profitability in the coming years.
Taking a multi-pronged approach to stay competitive in an increasingly challenging industry, BMW is not only focusing on expediting new model launches and enhanced production volume, but also cutting costs, overhauling its management ranks and embracing the wider adoption of artificial intelligence both on factory floors and at other operations.
Bloomberg has reported that BMW now expects car deliveries to decrease moderately compared to last year, while the prior guidance called for just a slight decrease. Strong demand for new models, including the BMW iX3 SUV, boosted Q3 CY26 margins to 3.4%, revealed the automaker. The company still expects its automotive segment to generate more than $2.8 billion in free cash flow in 2026.
By the start of next decade, BMW aims to return to its long-term auto-margin target of 8% to 10%. The company is targeting an improvement to as much as 5% as soon as 2028.
The auto OEM is dealing with collapsing demand in China, which is resulting from intensifying competition from local brands such as BYD, especially in the electric vehicle domain. This came after years of relying on the Chinese market to fuel profit and growth. Last month, BMW said that deliveries within the region plunged 25% in Q3 from the same period a year ago.
In a bid to increase its profitability, BMW is taking a deep dive look at the manufacturing footprint, technology stack and white-collar workforce in order to accelerate as quickly as possible the competitiveness of its industrial footprint.
