BMW unveiled a restructuring plan focused on introducing artificial intelligence, reducing management staff and launching two new models. The German automaker is looking to regain investor confidence as profits continue to fall and its share price plummets. The company plans to cut about 8,000 jobs in Germany, joining Volkswagen and Mercedes-Benz in cost-cutting measures.
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BMW’s reputation for stability has been damaged by weak demand, competition from China and restrictive U.S. tariffs. In June, the company issued its third profit warning in more than three years due to poor performance in the Chinese market. The company’s shares have fallen by more than a third over the past year, hitting their lowest in more than six years.
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Chinese consumers increasingly favor domestic brands. That’s hurting sales in the world’s largest auto market, which has long been a major source of profit for European automakers. Additional pressure comes from U.S. tariffs, although BMW will be less affected than some rivals due to its plant in Spartanburg, South Carolina.
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BMW unveiled its recovery plan today at an investor event at the Gutschwarzenbach complex in Bavaria and the company’s headquarters in Munich. The company has set a medium-term profit target of 3% to 5% in 2028 for its core automotive business. By the early 2030s, BMW plans to return to a profit level of 8% to 10%. The current profit level is 2.3%.
By mid-2027, BMW plans to reduce the number of departments and related management positions by a fifth. Artificial intelligence must play a key role in optimizing company operations and speeding up decision-making. BMW is also adjusting its product strategy according to different trends in major markets: it plans to launch an affordable electric car in Europe starting in 2028, while a new luxury SUV will target wealthy consumers in the United States.
BMW plans to deepen the localization of production in China and rely more on local partners for technology, especially autonomous driving systems and integrated software. The company is also considering the possibility of exporting products from China to Southeast Asian countries.
“Faced with the increasingly complex situation, we have identified priority measures to change our strategy and intend to resolutely start implementing them.”said BMW CEO Milan Nedelkovic, who will lead the company in May 2026. He said the company could not foresee such rapid changes in the Chinese market. However, Nedelkovic believes that the restructuring plan proposed this time will help BMW “Dealing with the increasing competition that will shape the industry in the coming years”. He emphasized ‘This is more than just a cost-savings program’.
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