The best $30 investment I ever made

I was still a young commercial real estate (CRE) developer in 1990, working in Spartanburg, South Carolina – where I still live today. This area has been very good to me over the years.

But since I was trying to pay off my student loans at the time, I was less than thrilled when the local board of realtors asked members to contribute about $30 each – per month! – to incentivize BMW into investing in Spartanburg.

Said automaker was looking to establish its first full manufacturing plant outside of Germany, you see. So there would be enormous economic ramifications for whatever town it chose.

Problem was we were hardly the only possibility. And $30 wasn’t exactly pocket change back then, especially for someone with limited income. Still, I begrudgingly joined the others in my company to pool our resources.

As it turned out, that was one of the best investments I ever made – not just for me, but for the entire upstate area.

On June 23, 1992, BMW officially chose Spartanburg County, pledging an initial $600 million investment. This would employ 2,000 people by 2000 and attract at least nine suppliers to South Carolina.

About 26 months later, the first customer vehicle, a 318i, rolled off the assembly line. And things just got better from there as BMW’s success necessitated the rise of other businesses around it.

That’s how I became the lead developer for one of its Tier 1 suppliers, Lemförder (now part of ZF). We developed a facility in nearby Hillside Industrial Park that started out at 88,000 square feet.

Then it had to be expanded by about 44,000 square feet as production increased… and then again by another 35,000.

Business was booming, and it still positively impacts my region today. Looking at the ongoing transformations around me, all I can say is that my $30 contributions were exceptionally well spent.

Back in 1990, Spartanburg was still struggling to replace the textile jobs it thrived on in the ‘60s… then lost to overseas production starting in the ‘70s.

So when BMW stepped into town, it didn’t simply build a factory. It created an entire ecosystem, making us a global anchor that attracts capital, suppliers, and skilled employment alike.

At last check, the company has invested nearly $16 billion directly in South Carolina – more than 26 times its original commitment!

There have been seven major expansions, a new $1 billion upgrade for electric vehicles (EV), and a new $700 million high-voltage battery-assembly plant in nearby Woodruff.

As for BMW’s promise to attract nine Tier 1 suppliers? There are now more than 60 in South Carolina, with more than 400 suppliers nationwide.

Magna… Gestamp… Benteler… Dräxlmaier… Michelin… Lear… These companies weren’t here before.

Gestamp alone announced a $129 million Union County expansion to serve BMW and Volvo. And Magna invested $29 million in a Spartanburg seating plant for those vehicles.

Then, last September, ZF Chassis Systems Duncan said it’s making another $55.4 million investment. This includes a new 477,360-square-foot axle-assembly facility that should begin operating in 2027.

Over three decades after I helped develop that original Lemförder building, its successor is still going strong.

I owe a lot to BMW for turning my county around, which might make me somewhat biased. But that bias is backed by the facts and figures below – which could indicate further growth for investors willing to put their “$30” down now.

There are plenty of car companies out there. But BMW Group stands out quite clearly on the global stage, operating 32 production locations across 15 countries.

In 2025, it manufactured approximately 2.46 million BMW, MINI, and Rolls-Royce models. And since 1994, it’s total output stands at 7.3 million.

Moreover, the company exports more than half of those models worldwide to almost 120 countries. By value, it’s America’s largest automotive exporter.

Last year, electric vehicles (EVs) represented 26.1% of BMW’s deliveries. And it’s also a leader in the technology behind them through its Neue Klasse (“new class”) platform.

Its sixth-generation battery cells feature close to 20% greater energy density with 30% faster charging and 30% better range. And when its all-electric IX3 SUV hits the U.S. market later this month, it will boast a 400-mile range at a probable starting price of $61,000 or so.

By 2030, there should be a total of six EVs available to Americans – all of which, incidentally, Spartanburg will help manufacture.

Yet despite that global success story, BMW’s European shares are down about 33% year to date. That puts them near €63… which is below where they traded a decade ago.

That’s cheap.

U.S. investors can purchase BMWKY, the company’s over-the-counter ADR, for around $24. Each unit represents a third of a regular BMW share. But before you jump all in on my glowing words above, understand that there is a reason for the selloff.

That reason is China.

BMW issued a 2026 profit warning earlier this year as domestic Chinese manufacturers such as BYD continue taking market share from European luxury brands. In the second quarter, its sales there fell approximately 30% year over year, compared with a 4.9% decline in global deliveries.

Meanwhile, for the first half of 2026, BMW saw revenue of €62.3 billion and €4.1 billion of earnings before tax. For the same period in 2025, those figures were €67.685 billion and about €5.7 billion, respectively.

Also telling is how its automative earnings before interest and taxes (EBIT) margin was 3.6% for H1-26… but only 2.3% for Q2. And BMW expects an automotive margin of 1%–3% for the full year versus 2025’s 5.3% and its longer-term target of 8%–10%.

The market has interpreted that as the end of BMW’s road.

But I think that’s going too far.

For one thing, BMW still maintains strong positions in both Europe and the U.S. It has an exceptional balance sheet and a promising EV platform.

Plus, CEO Milan Nedeljković said the company is taking “immediate, decisive action” to improve performance, including:

At the same time, BMW has passed peak investment. So that should reduce capital expenditures (capex) further and improve free cash flow (FCF) along the way.

There’s also a capital-markets event this month to consider, where BMW may increase its targeted dividend payout from roughly 30%–40% of earnings closer to the 40%–50% range – which could be a stock price catalyst. Though, of course, nothing is guaranteed.

Notably, the automaker already repurchases over €1 billion worth of shares every year. That’s almost 3% of its market value and a sign of confidence for the future.

BMW’s current market capitalization is approximately €38 billion (roughly $43 billion), which is less than both General Motors’ (GM) and Ford’s (F). And shares – which are yielding over 7% right now – are trading at around 6x trailing earnings, which is less than 0.4x its book value.

Consensus estimates for 2026 indicate that this is the worst it’s going to get. Profits should fall roughly 40% before recovering toward €8 per share in 2027.

Also in its favor:

Together, those pieces approach €100 per share versus the current stock price of around €63.

Naturally, none of that guarantees the stock is actually worth €100. Auto assets typically deserve a cyclical discount, for one thing. And BMW’s finance unit carries credit and residual-value risks that are important to understand.

There’s also the fact that automakers deal with heavy capital requirements, high costs of labor, and volatile margins – just to name a few issues. So I do understand why many investors won’t touch them at all.

Even so, the iconic BMW does appear better positioned than most of its European competitors. Its flexible global production network, credible EV platform, and the genuine margin of safety on its balance sheet all speak in its favor.

More than three decades ago, my reluctant $30-per-month contribution helped bring BMW to Spartanburg… ultimately producing returns far beyond anything I imagined it would.

Today, this same company’s battered shares may offer investors a similar opportunity: a world-class manufacturer, valuable assets, and a fortress-like balance sheet priced as though its current troubles will never end.

The road through China will undoubtedly remain bumpy. But at roughly €63 per share, I believe the potential rewards outweigh the risks for patient investors.

Sometimes the best investments begin when the outlook looks worst. And BMW may once again prove that a modest investment can pay dividends for decades.

Happy SWAN investing,

Brad Thomas
Editor, The Wide Moat Daily