BMW: to grow, more AI, fewer managers, new electric models and a large SUV
Fewer employees, more artificial intelligence, a streamlined product range and models tailored to different markets.
BMW is overhauling its industrial strategy with the aim of restoring profitability and bringing the automotive division back to the levels that have characterised the Munich-based group for years. For 2026, the manufacturer forecasts an automotive EBIT margin of between 1 and 3 per cent, whilst in 2028 the target will rise to 3–5 per cent. A return to the 8–10 per cent range is forecast for the start of the next decade, when the automotive division’s free cash flow is expected to exceed €7 billion, compared with the more than €5 billion forecast for 2028 and the €2.5 billion projected for 2026. The plan presented at the Capital Market Day follows a challenging period. In the second quarter, the automotive EBIT margin fell to 2.3 per cent, whilst weakness in the Chinese market and US tariffs led the Bavarian manufacturer to revise its outlook on several occasions. On the stock market, the share price has lost over a third of its value in a year, falling back to its lowest levels in over six years.
Fewer managers and a simpler structure
By mid-2027, BMW will reduce the number of divisions and the associated managerial roles by 20 per cent, with a similar reduction at the levels immediately below. Over one hundred senior management positions will be cut, including around one-fifth of the 65 senior vice-presidents. The reorganisation goes hand in hand with the programme agreed with employee representatives, which aims to reduce the total workforce by around 8,000 by the end of 2027, primarily through voluntary redundancies in administrative and development roles, whilst excluding production staff. The aim? To streamline decision-making processes whilst simultaneously shortening development times. Artificial intelligence will therefore play an increasingly significant role in vehicle development, procurement, production, sales, marketing and after-sales service.
More artificial intelligence in development
The group aims to move from using AI for individual applications to a system in which digital agents can handle an increasing proportion of the development process – from defining technical requirements through to testing and final validation – whilst leaving engineers in control of the outcome. Between 2026 and 2027, investments of around 200 million euros are planned for artificial intelligence programmes, from which BMW expects to generate around 1.2 billion euros in value by 2028. In some processes that have already been digitised, the group reports reductions of over 90 per cent in processing times, whilst a common software platform is set to enable the new digital architectures to be rolled out across more than 40 models by the end of 2027.
