BMW announced a sweeping corporate restructuring on Wednesday, laying out a multi-year plan aimed at restoring profitability and adapting its product lineup to shifting regional demand across Europe, the United States, and China.
The new management plan was unveiled during a capital markets day at the company's new battery factory in Irlbach-Strasskirchen, Lower Bavaria. CEO Milan Nedeljkovic said the initiative goes beyond simple cost-cutting and targets a fundamental change in how the company operates.
"This is not a savings program," Nedeljkovic said. "It is fundamentally about the way we work."
BMW aims to raise its return on equity (ROE) to between eight and ten percent from the start of the 2030s. For the near term, the company expects ROE of three to five percent by 2028, up from one to three percent in the current year. Cash inflows should double to five billion euros by 2028 and reach seven billion euros from 2030 onward.
The restructuring will include the elimination of 8,000 jobs in administration and development at BMW's Munich headquarters. Production roles were explicitly spared. Further job cuts or restructuring measures remain under review, with decisions expected by spring 2027, Nedeljkovic said.
On the stock market, BMW shares rose three percent following the announcement. Analysts at Citigroup noted the plan is inwardly focused, targeting improvements within the company itself. However, they cautioned that investors remain concerned about the broader deterioration in the automotive sector, which may require even more decisive action from BMW — similar to what Volkswagen has outlined in recent months.
Bernstein analyst Stephen Reitman called the plan "the beginning of the healing process," saying BMW understands that solutions extend beyond cost reductions alone. "It's also about pursuing growth with innovative products. The Neue Klasse is at the core of the recovery," he said.
Product Portfolio and Regional Strategy
BMW also reviewed its product range, planning to place greater emphasis on regional needs. A new small electric car for Europe and a large SUV positioned above the X7 for the U.S. market will be developed, while models such as the 2 Series Active Tourer, the Z4 roadster, and the 3 Series diesel will be phased out. Vehicles will increasingly be manufactured in the regions where they are sold.
Currently, BMW produces sedans primarily in Europe and SUVs in the U.S., exporting across the Atlantic to serve each market. Insiders say the company is now considering whether the X5 and its electric counterpart, the iX5, could also be built at BMW's Dingolfing plant in Germany. The move would ease capacity constraints at BMW's Spartanburg plant in South Carolina, which is operating at full capacity and has no room for another model without expansion.
China Strategy
BMW is also overhauling its approach in China, a market that has come under severe pressure. Nedeljkovic said the company had not anticipated the speed of the market's decline and therefore maintained cautious guidance. BMW currently sells primarily combustion-engine vehicles in China, but rising oil prices following the Iran conflict have reduced demand.
Expectations now rest on electric vehicles from the Neue Klasse, with the iX3 as the first model launching at the end of the year. Local production will expand alongside the new models, and imports will be limited to the most profitable vehicles. BMW also plans to strengthen its development operations in China. By 2030, the company aims to manufacture 95 percent of its China portfolio locally, with some vehicles exported from China to Southeast Asia.
AI Integration
BMW is placing significant hope in artificial intelligence. CFO Walter Mertl described agentic AI applications as a "game changer" for faster, more agile development processes and streamlined decision-making. AI has already been deployed in production for quality inspection and autonomous transport systems. In development, AI agents will help accelerate engineering timelines.
The company's strategic shift underscores the challenges facing the traditional premium automaker as electrification, competition from Chinese brands, and macroeconomic headwinds reshape the global auto industry.
