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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.

Hands on with the 2016 Mini Clubman

When the original Mini Clubman debuted, it was marketed as a bigger, more versatile version of the popular Hardtop. But over the years, the British brand's lineup has grown both in terms of vehicle size and number of models on offer, leaving the original car's formula by the wayside. There are now two five-door models, in the form of the Countryman and Hardtop, both of which offer more versatility than the four-and-a-half-door Clubman ever could. For 2016, Mini has transformed the Clubman, making it once again the brand's most versatile model. To familiarize ourselves with the new six-door model – yes, there really are six doors – ahead of the car's official debut in Frankfurt next week, Mini USA's product planning manager, Patrick McKenna, walked us through both the interior and exterior changes for the brand's newest model. As McKenna tells it, the BMW-owned company has gone to great lengths to make the Clubman more than just a long-wheelbase car with barn doors. There are changes both inside and out that not only serve to better distinguish this new model from the brand's other five-doors, but from anything else in Mini's lineup. Check out our chat with McKenna at the top of the page, and stay tuned for more Clubman news next week.

Mini John Cooper Works GP spied with wide body, big wing

The Mini John Cooper Works GP was just announced to have over 300 horsepower, and we got an early glimpse at it with teaser images. And now one of our spy photographers caught the car with very thin camouflage. The spy photos reveal that the Mini GP is sticking fairly close to the Frankfurt concept, but toning everything down a bit. At the front, the Mini GP clearly is using the current John Cooper Works hardtop front bumper, but it does have deep chin spoiler additions that allude to the GP concept's massive splitter. The grille has been revised, and the gloss black lower sections are now made of a matte black mesh design. The slot in the middle could have red accents on each side like the red stripe on the concept. The front spoiler blends right in to the new extra-wide fender flares. While the fender extensions don't protrude as far as on the concept, they're otherwise very similar in how they sweep backward at the tops and stand away from the body to allow air to flow through. Something else noticeable from the side are the enormous front brakes. The rotors nearly fill up the wheels, and the calipers look really beefy. The five-spoke wheels on this prototype will be replaced by GP-signature four-spoke wheels as revealed by teaser shots. The back of the GP looks about how we would imagine it. The split rear wing is roughly the same shape as the concept's, but a little narrower. The bumper has a big diffuser area that doesn't necessarily look functional, but should at least look cool. The rear exhaust tips look bigger than normal Mini John Cooper Works models. The Mini GP will go into production in 2020. Only 3,000 examples will be built. We suspect the GP will use the same turbocharged 2.0-liter four-cylinder engine as the BMW X2 35i, which makes 306 horsepower and 332 pound-feet of torque. Coupled with weight savings, possibly involving a rear seat deletion, and upgraded suspension, and this should be a shockingly fast Mini. Related Video: