Third Update - BMW hopes to revitalize its business through layoffs, new models, and artificial intelligence

Restructured according to company announcements

Christina Amann/Rachel More

Reuters Munich, September 30 - BMW BMWG.DE on Wednesday unveiled a restructuring plan centered on artificial intelligence, streamlining management, and launching two new models (link). The German luxury carmaker, which has recently issued a string of profit warnings and seen its share price drop sharply, is working to restore investor confidence.

As the European auto industry faces a triple challenge of weak demand, Chinese competitors, and US tariffs, BMW’s long-standing reputation for stability was badly hit in June (link)—when the company posted its third profit warning in just over three years, linked to underperformance in China.

In response, the company rolled out a job cut plan expected to affect approximately 8,000 jobs in Germany (link), joining rivals such as Volkswagen VOWG_p.DE and Mercedes-Benz MBGn.DE in efforts to slash costs and increase efficiency.

BMW’s share price has dropped by more than a third in the past year, falling to its lowest level in over six years. The company revealed the revival plan at a two-day investor event held at the Gut Schwaerzenbach resort in Bavaria and its Munich headquarters.

The company set a medium-term target of 3% to 5% margin for its core automotive business by 2028. By the early 2030s, BMW aims to restore margins to the 8% to 10% range, while its most recent earnings report showed a margin of only 2.3%.

The group plans to cut the number of departments and related management positions by one fifth by mid-2027. The company said artificial intelligence will play a key role in streamlining its structure and speeding up decision-making.

CEO Milan Nedeljković said in a statement this will help BMW "meet the increasingly fierce competition that will dominate the industry in the coming years."

The group is also adjusting its product strategy based on different trends in key markets, planning to launch an entry-level electric vehicle in Europe starting in 2028, while targeting high-income US consumers with an all-new luxury SUV.

In China, BMW plans to further advance local manufacturing and rely more on local partners in technology fields such as autonomous driving and integrated software. The company is also exploring the potential to export from China to Southeast Asia.

"Given the increasingly challenging environment, we have drawn up initial repositioning measures and will implement them with strong momentum," Nedeljković said.

Western carmakers are seeing Chinese consumers rapidly switch to domestic brands, which has hurt their sales in the world’s largest car market—a long-standing key profit source.

US tariffs have added further pressure, though BMW is less affected than some competitors thanks to its plant in Spartanburg, South Carolina.

(For the convenience of non-native English speakers, Reuters automatically translates its reports into several other languages. Because automated translations may contain errors or lack necessary context, Reuters does not guarantee the accuracy of the automated translation texts, which are provided solely for readers’ convenience. Reuters accepts no liability for any damage or loss arising from use of the automated translation feature.)