BMW has told its investors where it wants to be by the start of the next decade, and the route runs straight through the factory floor. At its Capital Market Day 2026 in Munich on 30 September, the carmaker set out a plan to return to its long-term Automotive EBIT margin range of 8% to 10%, with free cash flow in the segment climbing to at least €7 billion ($8 billion). The plan rests on a slimmer model range, more regionalised production, wider use of artificial intelligence and a management structure with a fifth fewer divisions.
A margin target built in two stages
Management expects the Automotive EBIT margin to land between 3% and 5% in 2028 as an interim step, with the full 8% to 10% range returning only at the start of the next decade. Several far-reaching decisions have been taken and first measures are under way. A large number of further topics are still being evaluated, with decisions expected by spring 2027.
In 2025 the group sold 2.46 million passenger vehicles and more than 202,500 motorcycles, posting profit before tax of €10.2 billion ($12 billion) on revenues of €133.5 billion ($150 billion). It runs more than 30 production sites and employed 154,540 people at the end of the year. The task is to defend that scale as market conditions harden, and BMW says it will lean on technology openness, its potential for technological innovation, a global presence and a clear premium brand strategy.
Milan Nedeljković, Chairman of the Board of Management of BMW AG, cast it as a question of nerve. “The BMW Group has always been at the forefront of the automotive industry – and that is where it belongs in the future as well. Under increasingly challenging conditions, we have defined initial measures to reposition ourselves and will implement them with strong momentum,” he said on Wednesday.
“The BMW Group has the critical expertise to successfully pursue this path. The strengths of our corporate culture are also crucial to this: Courage and pragmatism will be just as important as having an entrepreneurial mindset and the determination to succeed,” Nedeljković continued.
Walter Mertl, the board member responsible for Finance, added the investor angle. “The BMW Group remains committed to maintaining its consistent focus on value creation and sustainable profitability. At the same time, we will continue to ensure that our shareholders also share in the company’s long-term success.”
Fewer variants, more regional plants
BMW will align its models more tightly with regional customer preferences, expand and strengthen the range where it pays, and make significant adjustments to its drive train portfolio. The test is which models deliver the greatest value for customers and the highest contribution margins over the long term in each market.
At the top, the BMW, BMW M and Rolls-Royce brands will be refined to unlock additional earnings. Next year the first BMW ALPINA model arrives, inspired by the BMW 7 Series and slotted into the space between BMW and Rolls-Royce. Below that, the axe falls on complexity. The number of variants across the portfolio will be reviewed and reduced, and there will be no successor to models such as the BMW 2 Series Active Tourer. BMW has not said how this will show up on individual lines, but every variant removed is one fewer to schedule through body, paint and assembly.
China localises further
Local production in the high-volume segments will expand with the launch of the Neue Klasse, while imports will be limited to the models with the highest margins. Local development will grow too, with technology features designed around Chinese customers. The target is for locally manufactured vehicles developed specifically for Chinese preferences to reach at least 95% by 2030.
BMW is also weighing a further step. It is considering exports of China-built vehicles to Southeast Asian markets, which would give its Chinese network a role beyond its home market.
Spartanburg runs flat out
In the US, demand for premium Sports Activity Vehicles (SAVs) is so strong that Plant Spartanburg, the “home of X”, is already at full capacity. BMW is considering an additional offering above the BMW X7, closely tailored to US buyers, and is pushing for greater regionalisation so it can expand global SAV production and serve every sales region more directly.XXX SPARTANBURG STORY
Neue Klasse moves down the range
In 2028, with Europe in focus, BMW will add another fully electric Neue Klasse model in the high-volume entry segment. The technology first arrived at the core of the BMW brand and now reaches the upper segments through the BMW X5 and BMW 7 Series. Compact cars are next. Alongside the fully electric MINI range, the carmaker expects this to keep cutting its fleet-wide CO₂ emissions in the EU.
The factory side of that story is already visible. AMS has reported on how the Debrecen plant combines fossil-free energy, onsite battery assembly and digital twins, and on the start of pre-series production of the new i3 at Munich. BMW points to more than 100,000 new orders for the BMW iX3 in Europe and strong interest in the new BMW i3 and BMW X5. It also names the sixth-generation e-drive, the “Heart of Joy”, and the BMW Panoramic iDrive as brand-defining technologies.
AI already runs inside the plant
Artificial intelligence is the lever BMW leans on hardest, and it is pulled across the whole business, from development and purchasing to sales, marketing and aftersales. “Consistent use of agentic AI applications across all areas of the company will be a game-changer for more agile and efficient development, leaner structures and faster decision-making,” says Mertl.
On the shop floor, this is not a promise. AI is already an integral part of the BMW production system and a core element of the BMW iFactory Running on a standardised IT and data model, intelligent systems work at nearly every stage of production, from virtual factories with digital twins and AI-supported quality inspections to intralogistics with autonomous transport. Digital AI agents will increasingly take on demanding tasks autonomously through continuous learning. Pair them with self-learning robots and the result is what BMW calls Physical AI, the basis for flexible, efficient and competitive production.
Read more about BMW’s iFactory: the blueprint behind the new X5
Five drivetrains, humanoid robots and AI quality checks at Plant Spartanburg all trace back to one framework. AMS examines how BMW’s iFactory concept, tested end to end on the new X5, is reshaping what a modern assembly line is built to do.
Agentic AI enters development
BMW will carry AI from individual applications into core vehicle development, with agentic AI expected to support the process end to end, from initial technical requirements to testing and release. Specialised digital agents are being connected to development data and IT systems built up over decades. They analyse complex information faster, automate routine tasks and make processes more efficient, while developers monitor, review and finally approve every result.
Crash simulation is the worked example. BMW is combining its engineering datasets with the training capabilities of AI company Mistral to build specialised models that improve the quality, speed and efficiency of vehicle development. To scale this, it is relying on Large Industry Models, a new generation of AI systems trained on industry-specific engineering and simulation data.
Alongside them, high-quality “Industry Best Offer” solutions will be used more widely across development, purchasing and production, so BMW can focus its expertise and capacity on what truly differentiates its brands.
From software-defined to AI-defined
The first Neue Klasse models laid the foundation, as their zonal electrical and electronics infrastructure will be used across all vehicle segments, which reduces complexity, leverages economies of scale and brings new functions to customers faster. The next phase is the AI-defined vehicle, where the focus shifts from individual functions to the whole vehicle interacting intuitively across all domains, from driver assistance to infotainment and comfort functions.
Our global business model remains the foundation of our success. At the same time, we are improving our structures and cost base so we can meet the increasingly fierce competition that will define this industry in the coming years. The workforce restructuring programme is an important lever for this
Level 2++ driver assistance arrives in three regions
A new Level 2++ system, developed with Momenta, debuts in China with the Chinese variant of the BMW iX3 and offers the brand-specific BMW Symbiotic Drive. Next year, thanks to its development cooperation with Qualcomm, BMW will be among the first manufacturers to offer navigation-guided driver assistance in Germany on motorways, secondary roads and city streets, under the new DCAS regulation, a Europe-wide legal framework for Driver Control Assistance Systems. Other countries, including the US, will follow in stages, and customers on the new vehicle generation will be able to activate additional features over the air.
By the end of the year the Highway Assistant, with hands-free assisted driving, will be offered in 21 countries. BMW customers have already driven more than 250 million kilometres hands-free. In the upgraded version, the driver can accelerate, steer and brake as needed without immediately deactivating longitudinal and lateral guidance, which keeps the system intuitive and controllable within SAE Level 2.
Securing raw materials and chips
Geopolitical volatility has pushed BMW towards new partnerships, alternative concepts and closer cooperation, even among competitors within the European Union, to secure critical raw materials and components including semiconductors. Policymakers, the carmaker adds, are increasingly called upon to develop solutions alongside industry.
Agency sales and a leaner organisation
On the commercial side, the genuine agency model has gone live for MINI in 24 European markets, and the rollout for the core BMW brand begins in mid-2027. That gives BMW a consistent Europe-wide data basis from test drive to aftersales, with AI as the foundation of the sales system rather than an add-on.
BMW reached an agreement with the Works Council in July on a significant adjustment to personnel structures. Alongside a voluntary severance programme, processes will be streamlined and accelerated over the coming months. By the middle of next year BMW will reduce the number of divisions and associated management roles by 20%, with a comparable cut at the levels below. “Our global business model remains the foundation of our success. At the same time, we are improving our structures and cost base so we can meet the increasingly fierce competition that will define this industry in the coming years. The workforce restructuring programme is an important lever for this,” said Nedeljković.
BMW insists that technology openness and the Neue Klasse remain the cornerstones of its strategy. For suppliers and plant teams, the more useful reading is the calendar. The decisions due by spring 2027 will show which variants, plants and processes carry the margin recovery, and that is the moment to ask where your own products and lines sit in BMW’s plan.
Source: www.automotivemanufacturingsolutions.com
