Bayerische Motoren Werke Aktiengesellschaft Q2 Earnings Call Highlights

Bayerische Motoren Werke Aktiengesellschaft ETR: BMW said it is preparing a broad transformation program focused on streamlining processes, increasing the use of artificial intelligence and offering voluntary severance packages for indirect employees, while maintaining its production footprint in key regions. Get BMW alerts: Sign Up During the company’s earnings-call question-and-answer session, Board Member for Production Milan Nedeljković declined to confirm reported figures for planned job reductions. He said the initiative should not be viewed as a simple headcount-cutting program, but as part of a wider reorganization of the company’s processes, product development, procurement, sales and production operations. Tesla Market Sentiment Sours: Here Are the EV Winners “It’s not just about cutting jobs,” Nedeljković said. “This is one element to be faster and more effective.” Transformation Program and Severance Plan Nedeljković said BMW sees potential to simplify internal structures, redesign processes and use digital tools to improve decision-making. The company intends to examine areas including purchasing, product design, development, technology and its own manufacturing operations. Mobileye gets poked on weak forecasts, buying opportunity The company plans to launch a voluntary severance program for indirect functions within BMW AG. Employees in eligible roles will receive information on the value of a potential severance offer, although certain key functions will be excluded. Nedeljković said the program is designed to provide flexibility, including opportunities for employees to move into other roles within the company when necessary. Chief Financial Officer Walter Mertl said BMW’s annual guidance includes a 1.25 percentage-point impact related to severance programs. The company’s guidance calls for an EBIT margin of 1% to 3%, he said. BMW expects the analysis and implementation of the transformation to proceed over the next 12 to 18 months. Nedeljković said the company is already working through individual processes and expects the transformation program to be implemented by the end of next year. AI will be used to help employees handle broader responsibilities and reduce the need for work to be divided among highly specialized departments, according to Nedeljković. He said AI agents and support tools can give employees greater access to information, enabling smaller teams to take on more comprehensive tasks and make decisions more quickly. BMW will also use external experts and consultants for benchmarking and to learn from practices in other industries, he said. China Remains a Focus Management addressed continuing pressure in China, where Nedeljković said the company experienced a downturn in the second quarter amid broader weakness in the internal-combustion-engine market. He cited a 39% decline in June compared with the prior-year month, describing it as a significant impact. BMW has revised product content, increased vehicle value and adjusted its dealer network in China over the past two years, Nedeljković said. He said the company has found a more stable baseline in recent months and expects the Neue Klasse vehicle program to provide an opportunity to strengthen its position in the market. The Neue Klasse ramp-up in China is expected to begin at the end of the year. Management said customer, dealer and media feedback on the iX3 and its long-wheelbase version has been highly positive, but declined to provide sales forecasts or disclose pricing ahead of the start of sales. On pricing in China, Mertl said BMW had broadened and revised its product offering over the past 18 months. While list prices were reduced, transaction prices were maintained as dealer discounts narrowed, he s...