German carmaker BMW set out a restructuring plan on Wednesday. It is built around artificial intelligence, cuts to management and two new model launches.
The luxury brand wants to win back investors after several profit warnings. Its shares have fallen more than a third over the past year, according to Reuters. That is their lowest level in more than six years.
CEO Milan Nedeljković said the plans would help BMW “meet the increasingly fierce competition that will define this industry in the coming years”.
“It’s not a cost-savings programme,” said Nedeljković. He is the company’s former head of production and took over as CEO in May.
BMW shared the plan during a two-day investor event. It was held at the Gut Schwaerzenbach retreat in Bavaria and at the company’s head office in Munich.
The company set a target margin of 3% to 5% for its main car business by 2028. By the early 2030s, it wants that margin back at 8% to 10%. In its latest results, the margin was only 2.3%.
By the middle of 2027, BMW plans to cut its divisions and the management roles linked to them by a fifth. The company said AI will play a central role in making the business leaner. It said AI will also help it make decisions faster.
BMW is also changing which cars it sells in different parts of the world. It plans an entry-level electric car for Europe from 2028. In the United States, it will aim a new luxury SUV at wealthier buyers.
In China, the carmaker plans to build more of its cars locally. It will lean more on Chinese partners for technology such as self-driving systems and built-in software. BMW said it is also looking at exporting cars from China to Southeast Asia.
“Under increasingly challenging conditions, we have defined initial measures to reposition ourselves and will implement them with strong momentum,” Nedeljković said.
He added that BMW could not have known how fast the Chinese market was changing. For that reason, the company was careful with its forecast, he said.
Car makers in Europe face weak demand, strong Chinese rivals and US import tariffs. In June, BMW issued its third profit warning in just over three years. Each was linked to weak sales in China.
The company then started a redundancy programme. It is expected to affect about 8 000 jobs in Germany. Rivals Volkswagen and Mercedes-Benz are also cutting costs.
Western brands have watched Chinese buyers move quickly to local car brands, Reuters reported. China is the world’s largest car market and has long been a big source of profit for them.
US tariffs have added more pressure. BMW is less exposed than some rivals because it has a factory in Spartanburg, South Carolina.
Source: this article is based on reporting by TechCentral. Image: TechCentral. Written with the help of AI and published by the Tzaneen Voice Technology desk. See our Editorial Standards.
Werner Jacobs covers technology for Tzaneen Voice. Werner reports on mobile networks, data prices, internet access, smartphones, apps, AI, cybersecurity and South African tech companies. Each story explains what a new product, price change or policy means for ordinary users in South Africa.