BMW has announced a restructuring plan to address declining profitability and investor concerns. The strategy includes expanding the use of artificial intelligence to improve organizational efficiency and accelerate decision-making processes. By mid-2027, the company intends to cut one-fifth of its departments and corresponding management positions.
The automaker faces significant challenges, including weak demand in China, rising competition, and tariff pressures in the US. Over the past year, BMW shares have fallen by more than one-third, reaching a six-year low. The company recently reported an automotive profit margin of 2.3%, well below its long-term targets.
BMW has set a medium-term profit margin goal of 3–5% for its core automotive business by 2028, aiming to return to 8–10% by the early 2030s. To support these goals, the company plans to launch an entry-level electric vehicle in Europe by 2028 and a new luxury SUV for the US market.
In China, BMW will focus on further localizing production and collaborating with local partners on software and autonomous driving. The company is also exploring the possibility of exporting vehicles from China to Southeast Asia. These measures follow a series of profit warnings issued over the past three years.
