BMW (BMWG.DE): Ahead of CMD: Our expectations going into the event

We look forward to attending the upcoming BMW CMD on the 29th and 30th of Sept. In summary, we would like to hear how BMW plans to adjust its manufacturing footprint in order to target a ~5% automotive margin in the medium term, which would in turn support strong free cash flow generation and shareholder remuneration. Although we expect the firm to maintain its 8-10% long-term automotive margin target, this in our view is not a realistic one for the coming 3 years in the light of the global competitive landscape. We expect BMW to focus over the next 3-5 years on a strategy to restore the BMW automotive business to a ~5% operating margin level, which would ensure the firm is able to generate >EUR 3.5bn free cash flow, supporting strong dividend payments and share buybacks. On production peak to trough, one of the key variables will be whether production stabilizes in China for BMW;