When Milan Nedeljković formally took the chairman’s seat after the May 2026 annual general meeting, he stepped into a corner office that already had a to-do list written in red. The outgoing chief Oliver Zipse left behind a group with strong underlying assets but a stock that has lost about a quarter of its value since January — and the pressures are piling up from multiple directions at once.
The handover was planned well before any crisis, but the timing couldn’t be less forgiving. Nedeljković, a BMW lifer who joined as a trainee in 1993 and rose through production roles, has a contract stretching to 2031. The board has bet on continuity over radical change, yet the first quarter of his tenure will test whether that faith is justified.
Compounding the leadership transition is a recall that emerged in recent weeks. BMW is calling back 4,843 units of the iX3 electric SUV worldwide because side airbags may have been incorrectly fastened. In Germany alone, the Kraftfahrt-Bundesamt counts more than 1,000 affected vehicles, while BMW spokespeople put the domestic number at over 2,900. The recall covers models built between December 2025 and May 2026. No accidents linked to the defect have been reported, but the timing stings: investors are already hypersensitive to any quality blemish in the EV lineup.
That operational headache sits on top of a far bigger strategic headache — China. BMW delivered around 144,000 vehicles there in the first quarter of 2026, a drop of 10 percent year-on-year. A separate measure shows overall Chinese sales sliding 16 percent, reflecting both volume erosion and pricing pressure. The group’s first-quarter net profit slumped 23 percent, closely tracking the average decline among German automakers documented in a recent EY analysis. Revenue fell 8.1 percent to just over €31 billion, the ninth consecutive quarterly decline.
Tariffs have gnawed away at margins in the automotive segment, shaving 1.25 percentage points off the EBIT margin. The segment still managed 5 percent, keeping BMW inside its 2026 target corridor of 4 to 6 percent, but the buffer is thin. The overall group EBIT margin came in at 6.5 percent, well ahead of Volkswagen’s 3.3 percent, though hardly reassuring when the most profitable market is losing momentum.
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Nedeljković’s strongest card may be the Neue Klasse architecture, the next-generation electric and software platform he helped shepherd into series production as head of manufacturing. The project is now his to own. Models such as the long-wheelbase iX3 and the i3 are expected to counterbalance some of the China weakness, but the ramp-up will take time and capital.
Parallel to the Neue Klasse, BMW is pushing hydrogen as a complementary technology. At its Landshut plant, the company has begun pre-series production of the “Energy Master,” a central control unit for hydrogen fuel-cell drivetrains. The component is destined for the iX5 Hydrogen, slated for 2028. A second production line for the electric-vehicle version of the Energy Master has also gone live on the same site. For the first time, development and manufacturing of the unit are entirely in-house. Public funding is underwriting part of the effort: the federal government is contributing €191 million, and Bavaria is adding €82 million through the “HyPowerDrive” programme.
Longer-term, BMW is laying groundwork for circularity. In Wackersdorf, the company is building a “Competence Center Circularity” focused on dismantling and recycling vehicle components. The centre is scheduled to start operations in early 2029 and already employs roughly 9,000 staff.
On the shareholder front, the dividend yield looks tempting at around 6.02 percent, based on last twelve months’ payout of €4.30 per share. A generous distribution alone, however, doesn’t solve the valuation puzzle. The stock trades just above its 52-week low, and the year-to-date decline stands at roughly 25 percent. The relative strength index has fallen to 29.1, deep into oversold territory, while the short-term moving average of €78.43 and the long-term line of €84.76 both sit well above the current price of €70.38.
Technically, a bounce is conceivable after such a steep drop. But Nedeljković will need more than a flickering indicator to change the narrative. The real levers lie in stabilising China, containing the recall’s reputational impact, and proving that the Neue Klasse can generate volume and margin simultaneously. With 154,540 employees worldwide at the end of 2025 and a solid balance sheet, BMW has the resources to weather a rough patch. The new chairman now has to show he can steer through it without losing speed on the transformation.
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