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BMW has started re-evaluating its future product strategy, including shelving its planned rival to the Mercedes-Benz G-Class, as changing market conditions have pushed the German car maker to reconsider which models will reach production later this decade.

This step follows what new CEO Milan Nedeljković described as a dramatic change in the automotive landscape over the past year, marked by softer demand in China, rising pressure from new Chinese rivals, tougher US trade barriers and increasingly uneven demand across global markets.

Speaking after BMW announced its second-quarter results, Nedeljković said the company was taking a fresh look at its future product plans instead of assuming that existing programmes would remain suitable for every market.

"In all these areas, we are taking significant steps and increasing the pace," he said. "For example, we are once again reviewing which technologies, model variants and drivetrains we will need in the future. In addition, we are looking at where new partnerships could make economic and technological sense."

Nedeljković did not go as far as saying specific models could be cancelled or delayed, but his remarks are among BMW’s clearest acknowledgements so far that planning for future new models is becoming more fluid as global demand changes at different speeds.

It is understood that this review has already affected at least one much-anticipated model. Insiders at BMW’s Munich headquarters indicated that the proposed G74 off-roader has not secured final approval and is currently on hold.

The now-paused model is believed to have developed from an early Neue Klasse-based electric concept into a proposal built on the cluster architecture, or CLAR, and would have been offered with a broad range of drivetrains.

Although BMW has not officially commented on the G74’s status, its apparent shelving reflects the new approach to future model investment outlined by Nedeljković.

While explaining the revised reassessment process for new models, Nedeljković identified China as one of BMW’s biggest challenges.

"The rapid deterioration of market conditions in China was the main reason we adjusted our guidance in June," he said, adding that new competitors are now expanding beyond China into other Asia-Pacific markets, Latin America and Europe.

He also pointed to a mix of tariffs, trade barriers, currency fluctuations, tighter regulation in Europe and the continuing conflict in the Middle East as factors that have fundamentally changed BMW’s business.

Instead of committing only to electric models, BMW is continuing development of petrol, diesel, plug-in hybrid, electric and hydrogen-powered vehicles, arguing that customer demand is now diverging more sharply across major markets.

"The needs and expectations of customers vary greatly from market to market – and even within individual markets," Nedeljković said. "Our sales figures in the second quarter reflect this reality and the strength of our technology-open approach."

He noted that sales of electric models in Europe rose by more than a third during the second quarter, while internal combustion-engined vehicles posted double-digit growth in the United States as demand for electric models fell across the broader American market.

The review comes even as BMW’s Neue Klasse programme continues to build strong momentum.

Nedeljković said the new iX3 continues to draw strong demand, with BMW now nearing 100,000 orders. The company has already added a second production shift at its new Debrecen plant in Hungary to keep up with demand.

BMW says the Debrecen ramp-up is the fastest it has achieved at any of its new production facilities, with the second shift brought in ahead of schedule in response to customer demand.

According to Nedeljković, early demand for the new i3 has also gone beyond expectations, with pre-orders opening ahead of schedule in June before the full order books open at the end of September.