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BMW warns profits will fall, plans $13.6 billion in cost-cutting

FRANKFURT, Germany — BMW said Wednesday that profits in 2019 will be "well below" last year's, and it will cut 12 billion euros ($13.6 billion) in costs by the end of 2022 to offset spending on new technology. The company said profits would be eroded by higher raw materials prices, the costs of compliance with tougher emissions requirements and unfavorable shifts in currency exchange rates. The Munich-based automaker also faces increased uncertainty due to international trade conflicts that could lead to higher tariffs. "Depending on how conditions develop, our guidance may be subject to additional risks; in particular, the risk of a no-deal Brexit and ongoing developments in international trade policy," said Chief Financial Officer Nicolas Peter. The company forecast a profit margin of 6 to 8 percent for its automotive business, short of the long-term strategic target of 8 to 10 percent, which it said still "remains the ambition" for the company if given "a stable business environment." BMW said it had no plans for layoffs even as it outlined cost saving measures that include dropping half of its engine variants as it seeks to reduce product complexity. The BMW, Mini and Rolls-Royce brands are to get a single sales division. Peter said that given the headwinds to earnings, "we began to introduce countermeasures at an early stage and have taken a number of far-reaching decisions." The company said the measures were needed "to offset the ongoing high level of upfront expenditure required to embrace the mobility of the future." Automakers around the world have faced heavy up-front costs for technology expected to change how people get from one place to another in the next decade. Those include electric cars and renting cars through smartphone apps. Yet the returns from such investments remain uncertain and auto companies face competition from tech firms such as Uber and Waymo. BMW made 7.2 billion euros ($8.2 billion) in net profit last year, down 17 percent from 2017, when it booked a gain of $1 billion from U.S. tax changes. The company faced headwinds from increased tariffs on vehicles exported to China from the United States. It also suffered from turmoil on the German auto market when companies faced bottlenecks getting cars certified for new emissions rules. BMW faces uncertainty from U.S.-China trade tensions that could result in new tariffs if talks do not result in an agreement. U.S.

Recharge Wrap-up: BMW invests in Zirx, EV charging on National Mall

BMW i Ventures has invested in valet company Zirx. Zirx offers on-demand valet services in urban centers and other areas where parking can pose a challenge to drivers. Drivers use the Zirx app to mark their location, where an agent will pick up the car and park it and, if desired, refuel/recharge, wash or have other maintenance performed on the vehicle in the meantime. "BMW i Ventures provides equity financing to service providers it identifies as having high potential to make urban mobility smarter, more efficient and more flexible," says BMW i Ventures Managing Director Ulrich Quay. "With its combination of service and technology that makes it easier for drivers to park and take care of their cars, ZIRX has the potential to be a central component of on-demand services." Read more in the press release below. Tesla gets more Google searches in China and Norway than any other automaker. While Toyota searches dominate much of the rest of the world, Tesla is enjoying solid favor in Norway. While electric vehicles make up about a quarter of new car sales in the Scandinavian country, Tesla has had trouble getting a foothold in China. Perhaps the Google searches mean Chinese drivers could be warming up to the automaker. Read more from Gas2. Two EV charging stations have been installed at the National Mall in Washington, DC. Installed by the National Park Service, the stations – which cost $2 per hour to use – are located across from the National Museum of American History and from the National Air and Space Museum. "As the National Park Service prepares for its second century of service to the American people, we are committed to providing clean and green energy to promote a healthy environment," says the National Park Service Acting Superintendent Karen Cucurullo. Read more from NBC Washington. BMW i Ventures Makes Strategic Investment in ZIRX New investment helps fuel ZIRX's expansion into new markets and service offerings; company introduces ZIRX Enterprise SAN FRANCISCO and NEW YORK, Sept. 2, 2015 /PRNewswire/ -- BMW Group today announced a strategic investment in ZIRX under the company's venture capital entity, BMW i Ventures. An innovative on-demand parking and car services company built for drivers, ZIRX eliminates the frustration that drivers face in owning a car and parking in major urban markets like New York, Los Angeles, San Diego, San Francisco, Seattle and Washington D.C.

Are future vehicular hacks inevitable?

Before the hack of the Uconnect system in a Jeep Cherokee resulted in a 1.4-million vehicle recall, the potential software vulnerabilities in vehicles were already a hot topic with Congressional inquiries and even proposed legislation in the US. As cars' interconnected systems gain the ability to go online, they become open to a host of new threats. Automakers are trying to stop this, but it might be too late to put the genie back into the bottle. Throughout 2015, the issue of software security in vehicles has become increasingly vital. For example, the recent Jeep case wasn't even the biggest hack this year. In February, a major flaw was discovered in the BMW Connected Drive service that allowed researchers to remotely lock and unlock the doors and potentially affected 2.2 million cars. The fix was an over-the-air patch for the problem. Automakers are actively working to fix the issues. Mercedes-Benz, BMW, and Audi reportedly are using encrypted connections and firewalls in their vehicles to prevent hacking. "Absolute, 100-percent safety isn't possible," Daimler spokesperson Benjamin Oberkersch said to Automotive News Europe. "But we develop our systems, tested by internal and external experts, so they're up to date." These vulnerabilities seem to be popping up more often. A successful hack took $14 in parts from Radio Shack in one case. There was also a 60 Minutes report earlier in the year about DARPA's ability to hack into OnStar to take control of a Chevrolet Impala. Experts aren't so sure companies can contend with hackers' advancement. "The difficulty for the carmakers at the moment is the question whether they can keep pace with advances in technology, and especially hacking technology," Rainer Scholz, executive director for telematics consultant EY, said to Automotive News Europe. "We seriously doubt they can." At this point, vehicle hacks are coming more from researchers looking for holes than from those with malicious intent. Still, the vulnerabilities are definitely there. It's up to automakers to keep patching the problems before they become dangerous to drivers. Related Video: News Source: Automotive News Europe - sub. req.Image Credit: Bill O'Leary / The Washington Post via Getty Images Audi BMW Jeep Mercedes-Benz Safety Technology Emerging Technologies hacking cyber security