BMW Seeks €1 Billion Savings in Secondary Purchasing Costs

BMW AG says it aims to reduce its indirect procurement costs by €1 billion ($1.1 billion) in two years.

Markus Duesmann, who heads BMW production, tells Germany’s Handelsblatt newspaper that BMW spends about €20 billion per year on such purchases. He says the company is looking for savings to help fund development programs for electrified power trains and autonomous vehicle technology.

It isn’t clear if the reduction target Duesmann references is part of a cost-cutting program mentioned last month by Chief Financial Officer Nicholas Peter. He told reporters two weeks ago that BMW will integrate option packages and reduce powertrain choices in a bid to increase funding available for electrification and self-driving car systems.