BMW has unveiled a recovery plan that involves streamlining its management structure through the use of artificial intelligence, launching new models in Europe and the US, and increasing localisation in China. The company is seeking to boost margins in its core automotive business following a series of profit warnings, a fall in share prices and weaker results in the Chinese market.
Briefly about the main points
- By mid-2027, BMW will reduce the number of divisions and management roles by a fifth.
- AI is set to speed up decision-making and simplify the group’s structure.
- The automotive division’s profit margin target is 3–5% by 2028.
- Europe will get an affordable EV from 2028, whilst the US will get a new premium SUV.
- In China, BMW is set to expand its technological localisation and is exploring the possibility of exporting to South-East Asia.
AI and fewer management tiers
BMW By mid-2027, it intends to reduce the number of divisions and associated management posts by 20%. The company has identified artificial intelligence as one of the key tools for optimising its structure and speeding up decision-making.
General Director Milan Nedelkovich He stated that these measures should help the group compete in the face of increasingly fierce competition within the industry. At the same time, he emphasised that BMW does not regard the initiative as a cost-cutting programme.
A separate voluntary redundancy scheme is in place in Germany, which is expected to affect around 8,000 jobs. It was launched following yet another deterioration in the company’s financial outlook.
Target: a margin of 8–10% in the early 2030s
BMW has set itself the target of achieving a margin for its core automotive business of 3–5% by 2028. In the early 2030s, the company aims to bring it back to the 8–10% range, whilst in its most recent financial report the figure stood at 2.3%.
The plan was unveiled during a two-day event for investors in Bavaria and at the company’s headquarters in Munich. Over the past year, BMW’s share price has fallen by more than a third, hitting a low not seen for over six years. The manufacturer is under pressure from weak demand in Europe, competition from Chinese brands and US tariffs.
In June, BMW issued its third profit warning in just over three years, citing weak results in China. In 2025, this market accounted for around a quarter of all BMW Group deliveries, but local buyers are rapidly shifting their preference towards domestic brands.
Specific products for Europe and the US, local technologies for China
From 2028 BMW It plans to launch an electric car in the entry-level price segment in Europe. For more affluent customers in the US, the group is preparing a new premium SUV.
In China, BMW plans to localise production more extensively and rely more heavily on local partners in the development of autonomous driving systems and integrated software. The company previously entered into a partnership with Momenta to develop driver assistance systems tailored to the local market. BMW is also exploring the possibility of exporting cars from China to South-East Asia.
