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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.

BMW X1 spied in the snow, on the 'Ring

The next-generation BMW X1 is moving ever closer to production, and it reportedly launches in Europe in June. With just a few months left of development, the Bavarian brand is making sure to get in as much work in as possible – as the shots above show. According to our spies, all of these pictures were taken on the same day, but BMW was running two simultaneous evaluations of the crossover in Europe. At the sunny Nurburgring, the company was doing high-speed tests on the famous track. Meanwhile in chilly Sweden, cold-weather analysis was happening. Regardless of the location, these are some of the least camouflaged X1s photographed yet. Based on the shots, it appears that BMW is evolving the compact CUV's design rather than overhauling it, but there are a few dashes of styling from the 2 Series Gran Tourer in the grille and headlights, as well. The 'Ring shots also clearly show off a panoramic sunroof. While these examples wear a lot of obfuscation at the back, it's easy to make out BMW's LED taillights. The X1 shares its UKL platform with the Gran Tourer and the latest Minis, but possibly offers all-wheel drive. It's reportedly going to be offered with a similar range of turbocharged 1.5-liter three-cylinder and 2.0-liter four-cylinder engines, as well. Related Video: Featured Gallery BMW X1 Spy Shots View 17 Photos Image Credit: CarPix Design/Style Spy Photos BMW Crossover Luxury bmw x1 ring

BMW mulling potential 9 Series production

Nine months may be long enough to bring another human being into the world, but it may take BMW a bit longer to make up its mind on the production of a potential 9 Series model. The idea was first mooted when the Bavarian automaker presented the Vision Future Luxury concept at the Beijing Motor Show last year. Billed (not unlike rival Audi's Prologue concept) more as a design study than a pre-production concept, the Vision Future Luxury show car nevertheless took a larger form than the 7 Series, prompting speculation that a new flagship sedan could be in the works. The better part of a year later, such a decision has reportedly yet to be taken, but over at BMW Blog they're reporting that the automaker's incoming chief executive Harald Kruger is a fan of the idea and could give it the green light after he takes the helm in May. If approved, the model likely to be dubbed 9 Series would reportedly compete with the Mercedes-Maybach S600 – but then that model was earmarked to take on the Rolls-Royce Ghost. BMW has typically been careful not to overlap with its Rolls-Royce division, but considering how it's also been going downmarket with front-drive models to close the gap to the Mini brand, we wouldn't be all that surprised to see the 9 Series positioned maybe just below the next-generation Ghost and developed alongside it, taking a page out of rival VW's playbook. Volkswagen has, after all, made a brisk business out of sharing platforms and slicing market segments between the various brands under its umbrella. And while BMW is nowhere near as large, its new leadership could find new ways to increase its market share.