BMW reinvents its Munich plant with AI, automation and digital logistics to support Neue Klasse production and meet rising demand in a constrained city-centre location

BMW is preparing for a significant turning point with the launch of its all-new vehicle platform, the Neue Klasse. For Nikolaides, this is not just about launching a new electric model – it’s about reinventing BMW’s entire production ecosystem.

“The Neue Klasse is not just a new battery-electric vehicle. It represents a complete transformation of our product portfolio,” he said. “It is reminiscent of the 1960s, when BMW introduced the original Neue Klasse.”

This transformation is notably visible at the Munich plant, which Nikolaides described as a “symbol of performing while transforming.” Despite major construction to accommodate the new platform, the plant continues to deliver 1,000 vehicles per day, on time and in full quality.

iFactory: Digitalisation at scale
To navigate this important shift, BMW developed the BMW iFactory concept – its unified system for managing production and logistics change. At its heart is digitalisation, which Nikolaides framed through three key pillars: visualisation, artificial intelligence, and automation.

For the visualisation part of the programme, BMW is digitising its entire global production network – 30 plants, over 2.4m vehicles annually – into the Nvidia Omniverse. This enables rapid simulation, efficiency gains, and agile problem-solving:

“It allows us to gain speed, efficiency, and the ability to test everything in the virtual world before implementing it physically. This is a major step forward,” explained Nikolaides.

AI is already embedded across BMW plants. At quality control checkpoints, AI now drives inspections, improving speed and accuracy. But its impact goes far beyond defect detection:

“AI helps us steer supply chains dynamically… It allows us to reconfigure supply chains quickly when new regulations emerge – which happens almost daily.”

Integration was key to making AI work. Nikolaides stressed the importance of harmonising data systems early in the digitalisation journey:

“The first lesson we learned was that we had to bring order and structure to our data… We’ve since integrated all our production data into what we call our internal data lake.”

Automation: Smart transport and human-centric shifts

BMW’s automation strategy doesn’t mean removing humans – it means redefining their roles. Over 600 fully autonomous smart transport robots are in operation, developed in part by BMW’s own company, IdealWorks. These navigate plants independently and are deeply integrated into logistics flows.

Autonomous forklifts and route trains also coordinate through intelligent algorithms, further enhancing supply chain reliability without sidelining the workforce.

On integrating smart automation Nikolaides noted: “A forklift driver may no longer operate the vehicle, but they can move into maintenance or system supervision. Employees are eager to upskill into these new roles.”

AI a gamer changer for robotic applications
While BMW has used robotics since the 1980s, Nikolaides pointed out that what’s new is their convergence with AI. For instance, the Munich body shop has grown from 400 robots in 1982 to over 1,200 today, and that number is expected to surpass 2,000 with the Neue Klasse.

The future may even include humanoid robots. BMW is piloting a cooperative AI-driven humanoid at its Spartanburg plant in the US, inspired partly by industry buzz around Tesla’s Optimus project.

“It’s still early days… But there definitely are scenarios where you would not want humans working, due to safety or fatigue. In those cases, humanoid robots could be a real advantage,” said Nikolaides

Read more BMW stories

• BMW develops next-level digital manufacturing at Landshut and Regensburg plants
• Future-ready: BMW’s digital transformation of its Munich plant and beyond
• BMW plants prepare for a new era with Neue Klasse production
• Embracing agile, digital ecosystems: BMW, Mercedes-Benz & Dräxlmaier

Global volatility and strategic resilience

Despite internal innovation, BMW’s production network also faces external headwinds – geopolitical tensions, trade uncertainties, and regulatory flux. But Nikolaides views these not as roadblocks, but as reasons to build flexibility into every layer of operations:

“We don’t see it as difficult; we see it as challenging. The key is flexibility and speed.”

BMW is streamlining global flows by reducing border crossings, increasing supply chain transparency, and leveraging its international footprint. For example, the company’s largest plant being based at Spartanburg in the US is a strategic asset amid trade realignments.

How BMW is investing in emerging tech

Naturally, much of what Nikolaides described – humanoid robots, AI systems, omniverse simulations – comes with heavy upfront costs. But BMW applies a disciplined lens to all such investments. Pilot projects are evaluated not just on innovation appeal but on real-world applicability and ROI.

Nikolaides said “We apply the same criteria to all investments: cost-benefit analysis, feasibility, and alignment with our strategy – albeit now with a higher degree of uncertainty. So, we approach this like entrepreneurs.”

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Looking ahead: AI as a key enabler

Nikolaides returned to AI as the foundational driver of BMW’s future manufacturing model:

“AI has huge potential. In combination with automation and smart transport systems, AI has enormous potential. That’s where I see a lot of future development.”

What distinguishes BMW’s approach is not merely adoption of buzzworthy technologies but the integration of these technologies into a cohesive, human-centred production ecosystem. From smart robots in Munich to intelligent supply chains powered by harmonised data lakes, BMW is positioning itself to lead – not follow –the next industrial revolution.

As Nikolaides summed it up: “There is already a great deal happening, and AI is opening new worlds of possibility. This transformation continues.”

BMW Munich: Tackling logistics challenges with digitisation, real-time tracking, and workforce transformation

The BMW Munich plant, located in the heart of the city, is facing a unique set of logistics challenges. With limited space and growing production demands, the site is undergoing a major transformation powered by digitisation, automation, and workforce evolution.

BMW Plant Munich

BMW’s Munich plant’s city location presents logistical challenges

Logistics challenges at BMW Munich
Located in the city centre, the Munich plant is surrounded on all sides – residential zones to the east, west, and north, and BMW headquarters and the Olympic Park to the south. Expansion is not an option. For its logistics operations the plant carries approximately four hours stock, with additional supporting warehouse structures located in supply centres outside the city.

The compactness of the site demands a high degree of precision in logistics. Approximately 750 trucks enter and exit daily, handling 2.5m parts each day. With only 120,000 sq. m of external logistics space and a staff of 1,000 dedicated logistics personnel, maintaining efficiency is high priority.

Compounding the space constraint is increasing production volume, notably with the launch of the Neue Klasse models. Munich plant director Peter Weber highlighted that the higher demand further intensifies logistics strain:

“With higher demand, the challenges become ever more difficult to have everything covered in logistics.”

Digitisation in logistics operations
To meet these growing challenges, BMW Munich is embracing a future-forward, holistic digitisation strategy. Christian Gentner, who oversees plant equipment and automation, emphasised the multi-pronged nature of this transformation:

“We are pursuing a very holistic approach… concentrating not only on the systems, but mainly on people, our staff members, systems, and processes.”

At the heart of this approach is a wide-ranging deployment of automated transport systems. Which has seen the roll out of three types of autonomous vehicles:

• Small smart transport robots for lightweight deliveries
• Mid-sized autonomous carriers used in bodywork for heavier loads
• Automated forklifts that manage multi-level shelf loading

These systems are centrally managed through a real-time control centre, which allocates delivery tasks and integrates with BMW’s ERP system. As Gentner noted:

“The ERP system will also get the respective booking as soon as material is made available… It’s full automation from order placement to material flow.”

This infrastructure is aimed not just at streamlining deliveries but at creating complete transparency and responsiveness in the logistics chain.

Digitisation also plays a central role in future production planning. When asked about managing inventory levels during new model rollouts and maintaining lean manufacturing principles, a spokesperson clarified:

“We will always maintain customisation and order change activities from a customer’s perspective… but with each structural change – like new vehicle production – we move step by step toward this future-proof system.”

Real-time tracking and workforce implications
One of the most transformative aspects of this logistics overhaul is the move toward real-time material tracking. The Munich plant now has the capability to monitor load carriers live, detect bottlenecks instantly, and assess logistics system health via automatically generated KPIs.

“We get full transparency regarding our material flows… we can see in real time where we have those load carriers, where there are any bottlenecks,” Gentner explained.

This shift isn’t just about hardware and software – it’s driving a parallel evolution in workforce structure. The transition to automation doesn’t mean fewer people, but different roles. Forklift drivers are becoming system supervisors; operators are managing logistics control centres. New positions like automation technicians and control technicians are being defined, and staff are being trained accordingly.

This commitment to retraining and upskilling is backed by precedent. In a recent transition tied to engineering production, 1,200 employees were retrained in new technologies. The same philosophy underpins the current logistics transformation.

A logistics system for the future
BMW Munich is not just managing constraints – it is reimagining logistics under pressure. With digitisation at the core, automation expanding, and a clear investment in human capital, the plant is positioning itself as a model of how modern manufacturing can thrive even in confined urban environments.

As BMW looks ahead to increased production and more model variants, the lessons from Munich’s logistics overhaul – real-time tracking, automated fleets, and a redefined workforce – are likely to shape strategies across the company’s global operations.