BMW Aims to Cut Annual Purchasing Costs by €2 Billion

BMW AG intends to reduce its annual procurement costs by €2 billion ($2.4 billion) to help pay for the launch of at least 12 electric models by 2025.

Markus Duesmann, who heads purchasing, tells Bloomberg News that the cuts—equal to about 5% of current spending—will come from reduced spending on transmission parts and other components.

Earlier this week rival Daimler AG announced a similar initiative to lower its costs by €4 billion over eight years to help bankroll work on new powertrains and other technologies. Daimler is targeting reductions of €1 billion in fixed costs, €1 billion in spending on research and capital investments, and €2 billion from production cuts.