The BMW Group will take steps to improve profitability and resilience.

Image: BMW

The BMW Group aims to enhance its resilience, make its structures more competitive, and prepare for an increasingly challenging market environment. According to a statement, the Bavarian automaker relies on technological openness, innovation capabilities, global presence, and a premium brand strategy to achieve this.

The measures already approved are designed to increase speed and efficiency, while further actions will be decided by early 2027. At the beginning of the next decade, BMW targets an EBIT margin of eight to ten percent and at least seven billion euros in free cash flow in the automotive segment. For 2028, an EBIT margin of three to five percent is initially planned.

The model lineup is intended to be more aligned with region-specific customer preferences and to reduce the variety of options. BMW plans to focus on models that will generate the greatest customer value and contribution to profits in each market over the long term, adjusting its powertrain portfolio accordingly. The first model from the BMW Alpina brand will hit the market in 2027, while vehicles such as the BMW 2er Active Tourer will not receive a successor. Instead, an all-electric model in the entry-level “New Class” segment will be introduced in 2028, with a focus on Europe. At the higher end of the portfolio, BMW, BMW M, and Rolls-Royce are set to continue developing based on their respective strengths.

Model portfolio to be more regionally focused

In China, BMW is expanding local production in high-volume vehicle segments with the launch of the new class and reducing imports to models that generate the highest profit margins. By 2030, at least 95 percent of vehicles are set to be locally produced and developed specifically to meet Chinese customer preferences. Additionally, further exports from China to Southeast Asia are being explored. For the U.S., BMW is considering an additional model above the X7 and aims to increase the regionalization of SUV production.

Artificial intelligence should be more widely utilized across the enterprise, from development and procurement to sales and after-sales support. In manufacturing, intelligent systems are already integral to the production process and are used in areas such as digital twins, quality inspection, and autonomous transportation solutions. Digital AI agents are set to increasingly take on complex tasks autonomously. In vehicle development, agent-based AI will support processes from technical requirements to testing and approval, with developers overseeing the results, verifying them, and giving final approval.

AI and new technologies shape development

In the future, there should be greater use of “Industry Best Offer” solutions, while internal development resources are focused more intensely on areas that set the brands apart from competitors. BMW cites over 100,000 orders for the all-electric SUV BMW iX3 in Europe, along with strong customer interest in the new electric i3 and the X5, as evidence of its innovation capabilities. The modular electrical and electronic architecture of the New Class is set to be applied across all vehicle segments moving forward, serving as the foundation for the next step in development toward an “AI Defined Vehicle.”

The car manufacturer is also expanding its offerings in the area of driver assistance systems. In Germany, BMW plans to introduce navigation-guided driver assistance from highways and country roads to urban areas next year, with additional countries including the US following. By the end of the year, the highway assistant for hands-free driving is set to be available in 21 countries.

For critical raw materials and components, BMW is relying on new partnerships, alternative approaches, and enhanced cross-competitive collaboration within the European Union. Examples cited include critical raw material reserves and semiconductors. Starting in mid-2027, the agency model already used by MINI in 24 European markets is set to be introduced by BMW as well, aiming to create a unified data foundation throughout the customer journey. AI is intended to serve as the backbone of the sales system for offerings both through dealerships and digital channels.

BMW streamlines cost and management structures

Meanwhile, the company is reviewing costs, processes, as well as personnel and management structures. In addition to a voluntary severance program, efforts are underway to simplify and speed up processes, streamline management structures, and reorganize departments. By mid-next year, the number of departments and associated management roles is expected to decrease by 20 percent, with a similar impact at lower levels as well. The company had already agreed on adjusting the personnel structure with the works council in July.

"The BMW Group has always been at the forefront of the automotive industry, and that is where its place will be in the future," says CEO Milan Nedeljković. "Our global business model remains the foundation of our success. At the same time, we are making our structures and cost base more competitive to address the increasingly fierce competition that will shape this industry in the years ahead. The workforce restructuring program is a key lever for this."

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About the author

Thomas Langenbucher is an expert in electromobility with experience in the automotive and financial industries. Since 2011, he has been covering electric vehicles, sustainable technologies, and mobility solutions for ecomento.de. Learn more.

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