BMW Launches Restructuring Plan: More AI, a Fifth Fewer Management Roles and Two New Models

October 1 (IT Home) — According to a Reuters report on September 30, BMW has announced a restructuring plan whose main points include expanding the use of AI, streamlining management and launching two new models.

BMW had previously issued a series of profit warnings and its share price had fallen sharply; it hopes the plan will restore investor confidence.

The European car industry is facing weak demand, intensifying competition from Chinese carmakers and pressure from US tariffs. BMW, long known for solid management, issued another profit warning in June this year — its third in more than three years caused by weak performance in the Chinese market.

BMW then announced job cuts, with about 8,000 positions in Germany expected to be affected, joining Volkswagen and Mercedes in a wave of cost reduction.

Over the past year, BMW’s share price has fallen by more than a third, hitting its lowest point in more than six years.

BMW has set a medium-term margin target of 3%–5% for its core automotive business in 2028. By the early 2030s, it wants to lift the margin back to 8%–10%, while its latest results show a figure of just 2.3%.

BMW plans to cut one fifth of its divisions and the corresponding management positions by mid-2027, with AI becoming an important means of improving organisational efficiency and speeding up decision-making.

Milan Nedeljković, who took over as CEO in May this year after previously running production, said: “These plans will help BMW deal with the increasingly fierce competition that will determine the direction of the car industry in the coming years. This is not a cost-cutting plan.”

BMW is also adjusting its product line-up to the increasingly divergent demands of its main markets. Europe will get an entry-level all-electric model in 2028, while the United States will get a new luxury SUV aimed at wealthier consumers.

In China, BMW plans to push further ahead with localised production and to rely more on local partners in technical areas such as autonomous driving and software integration; exporting models from China to Southeast Asia is also under study.

Nedeljković said: “Faced with an increasingly severe environment, we have drawn up our first repositioning measures and will push ahead with them with all our strength.” He also said BMW had been unable to foresee how quickly the Chinese market would change, and was therefore cautious about forecasts.