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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.

Rolls-Royce rolls out more powerful Ghost V-Specification

With the release of the 624-horsepower Wraith fastback, Rolls-Royce proved that its 6.6-liter V12 engine could produce significantly more than the 563 horsepower it offers in the Ghost. But those looking for an extra dose of power yet still want the extra two doors - and have the six-figure price of admission to burn - will be delighted by the release of the Ghost V-Specification.
Although Goodwood has yet to put out a press release, its consumer website already has all the details we could want: the engine has been upgraded to 593 horsepower (to sit in between the base Ghost and the more powerful Wraith), driving the rear set of 21-inch two-tone alloys. Buyers will be able to choose from white, grey or three shades of black (or pick an existing color from the catalog), with a hand-painted coachline incorporating the same V-Specification emblem you'll find inside, where you'll also find unique piping and top-stitching, a custom dashboard clock, special treadplates and more.
Buyers will also be able to order their V-Specification Ghost in either standard or extended wheelbases at a price that's expected to, like the engine's output, bridge the gap between the more sedate Ghost and the more powerful Wraith. We're looking forward to seeing it in person at the Geneva Motor Show in a few months, but for now you can scope out the images in the gallery below and play with the configurator tool on the Rolls-Royce website.

Could Rolls-Royce expand business with new models?

Rolls-Royce may be forced to expand its lineup beyond the über-luxury cars gobbled up by the ultra-wealthy jetset, as new competition in the form of the rumored, high-end Mercedes-Benz S-Class could take a slice of the luxury pie from the BMW-owned manufacturer.
Automotive News reports that this, along with the combination of BMW's unwillingness to move above the price-point set by the 7-Series and Bentley's expansion into the SUV realm, could force Rolls-Royce's hand. AN is arguing that, as unrealistic as it might sound, Rolls could develop a four-door crossover or shooting brake, but that any such plans are in the earliest of stages.
In the near term, the smallest Rolls-Royce, the Ghost, will get a refresh in 2014, while the sporty Wraith fastback will spawn a convertible variant by 2015. The big boy of the Rolls-Royce range, meanwhile, is due for a far more comprehensive re-do. The Phantom is expected to share a platform with the next-generation 7-Series in 2016. Advanced materials are expected to feature heavily, as Rolls-Royce seeks to trim body fat and improve fuel economy without compromising the performance or comfort expected of the brands' flagship model.